2024-03-03 09:18:13
The dollar and the Egyptian pound
Economy of Egypt
Traders are talking regarding 45 pounds per dollar with a significant increase in supply
Cairo – Khaled Hosni
Published on: March 02, 2024: 11:20 AM GST Last updated: March 03, 2024: 08:50 AM GST
While a state of confusion dominates the parallel exchange market in Egypt, traders spoke of the continued decline of the dollar exchange rate on the black market to levels between 45 to 46 pounds during the past hours.
As the dollar exchange rate continued to fall in the parallel market, the supply increased by a large percentage as the rumors spread by traders and speculators failed to create a suitable environment for the return of the rise of the black dollar.
On pages that follow the dollar exchange rates on social media platforms, talk regarding the dollar has turned into fierce battles between those who bet that the decline in the price of the dollar on the black market is “temporary,” and those who believe that the crisis is almost completely over with the Egyptian government completing several deals. Of heavy caliber, the most important of which is the “Ras Al-Hikma” project.
Yesterday, the Egyptian government received another $5 billion from the first installment of the investment partnership deal with the United Arab Emirates, regarding the project to develop the city of “Ras El Hekma” on the northwestern coast of Egypt, and thus the first installment has been effectively completed.
The Egyptian Prime Minister, Dr. Mostafa Madbouly, announced during the government meeting that measures had been taken to coordinate between the Central Bank and the Emirati side, to transfer $5 billion from the deposit to the Egyptian pound, and that within two months Egypt would receive the remaining amount that was announced. To complete the amount of $35 billion in direct investment entering the state from this deal, in addition to the 35% that the state will receive from the net profits of the project.
The official spokesman for the Presidency of the Council of Ministers, Counselor Mohamed Al-Homsani, said that the Egyptian government received yesterday, Friday, another $5 billion from the first installment of the investment partnership deal with the United Arab Emirates, regarding the project to develop the city of “Ras Al-Hikma” on the northwestern coast of Egypt. Al-Homsani said: “With this, the first batch has actually been completed.”
Regarding the ongoing negotiations with the International Monetary Fund, the Fund’s Director, Kristalina Georgieva, said, “The basic issues regarding the review of the Fund’s loan program with Egypt have been resolved and we expect an agreement within weeks.”
She added, according to Reuters, that the Fund will likely increase the size of the program for Egypt due to external shocks, describing the talks with the Egyptian government as “very constructive,” adding: “We want to give them time to make decisions related to monetary policy.”
She stated that most of the direct impact of the war in Gaza on Egypt is the reduction of traffic in the Suez Canal by 55-60%, stressing that Egypt’s stability is important for the entire Middle East.
Following the announcement of the Ras El Hekma deal, JP Morgan had expected the exchange rate of the Egyptian pound to rise, with the price of the dollar ranging between 45 and 50 pounds, following the deal concluded between Egypt and the Emirates regarding the Ras El Hekma city development project. It is likely that the decline will be accompanied by an increase in the interest rate by 2%, to reach 23.5%.
Goldman Sachs believes that the announcement of Egypt’s agreement on its expanded program with the International Monetary Fund seems imminent, although the UAE’s deal to invest in the Ras al-Hikma project worth $35 billion over two months reduces Egypt’s immediate need for a financing package from the International Monetary Fund. .
Read also
1709457977
#Egypt. #Currency #traders #trouble #collapse #black #market #dollar
