It is noteworthy that the dollar had recorded 30.84 pounds for purchase and 30.94 pounds for sale last March before the decisions to liberalize the exchange rate on the sixth day of the same month, and jumped at the end of it to 49.47 and 59.57 pounds, respectively.
The exchange rate witnessed a significant rise yesterday to 49.20 pounds for sale and 49.30 for purchase, respectively, recording an increase of 1.4% since the beginning of this month.
Mahmoud Nagla, Executive Director of Money Markets and Fixed Income at Al-Ahly Financial Investment Management Company, attributed the sudden increase in the dollar exchange rate against the pound to foreigners exiting treasury bills at the beginning of yesterday’s trading, in a state of weight reduction, especially in light of the specter of recession that is now haunting the American economy in particular and the global economy in general, and the collapse of most financial markets.
He added in the Egyptian newspaper “Al Mal” that the state of panic that dominated foreign investors was driven by fears of a recession in the US economy, explaining that there are American reports indicating that the US economy is on the brink of recession, even if it has not yet reached it.
He explained that these foreign investors preferred to exit high-risk assets and then direct them to US Treasury bonds.
Banking expert Mohamed Abdel Moneim pointed out that there are several factors that combined to lead to the state of fluctuation witnessed by the currency market at the beginning of yesterday’s trading, and as a result the pound declined against the dollar.
He added that the most prominent of these factors is the pressure resulting from the exit of foreign investors from hot money (treasury bills and bonds), on the interest and installments that the Egyptian government must pay during this year or that have already been paid, which puts pressure on the foreign currency, and thus its price rises against the pound.
He explained that these foreign investors withdrew their investments in local debt instruments to cover their losses in other markets, especially in light of the state of decline that has tightened its grip on Arab and foreign markets alike.
Abdel Moneim expected the dollar exchange rate against the pound to fluctuate between 50 pounds, up and down, and to remain stable at this level until approximately the end of the year.
Source: Money
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2024-08-07 11:05:57
