Cairo, Egypt (CNN)–The average exchange rate of the Egyptian pound once morest the dollar fell to a level of 19.57 pounds for sale at the Central Bank of Egypt, on Wednesday, the lowest level in its history.
Analysts attributed the reasons for this decline to the continued decline in the volume of foreign exchange supply in exchange for demand, and they expected the pound to continue declining to range between 21-25 once morest the dollar.
The exchange rate of the pound once morest the dollar has fallen by more than 20% since last March, as a result of a gap in foreign exchange in Egypt due to the exit of indirect foreign investments, and the rise in global commodity prices and oil in the wake of the Russian-Ukrainian war.
Aya Zuhair, Deputy Head of Research at Zilla Capital Financial Consulting Company, said that the exchange rate of the pound will continue to decline once morest the dollar gradually during the coming period until it reaches its fair value according to supply and demand, and it is expected that its price will range between 21-22 pounds during the end of this year, but this The expectation is related to the non-interference of the government or the central bank to support the pound.
Zuhair also expected, in exclusive statements to CNN in Arabic, that the central bank would take a decision to raise the interest rate at the next Monetary Policy Committee meeting, accompanied by a decrease in the exchange rate of the pound once morest the dollar, and that this would be in parallel with the approval of the International Monetary Fund on new financing for Egypt within a month. or two months.
The Monetary Policy Committee of the Central Bank of Egypt will meet on November 3, to determine interest rates, following 3 meetings in which the interest rate was not changed.
Aya Zuhair indicated that the government took several decisions to reduce the inflationary shock as a result of the pound’s further depreciation once morest the dollar, as Egyptian President Abdel Fattah Al-Sisi announced that investors’ problems would be resolved within a month or two, and the Central Bank decided to raise the mandatory monetary limit for banks, and these decisions would reduce The inflationary wave, pointing out that there are expectations of a new sudden decrease in the exchange rate of the pound, and therefore the dollar is trading once morest 23 pounds in the parallel market.
Al-Sisi announced the completion of all existing obstacles facing investors within a month or two, and the facilitation of procedures to support the industry.
The deputy head of the research department at Zila Capital believes that it is necessary to quickly reduce the exchange rate of the pound once morest the dollar so that the vision becomes clear to foreign investors to pump more investments into the Egyptian market, as foreign investors are interested in determining the fair price of the pound without considering its decrease or rise in banks, noting that The Egyptian government issued several decisions to encourage the private sector and attract foreign investments.
Issa Fathi, a money market expert, said that the decline in the exchange rate of the pound once morest the dollar to a historical level is normal in light of the low volume of foreign exchange supply in front of the required, and therefore the price of the pound will continue to decline until it reaches its fair value, noting that the lack of foreign exchange affected the lack of availability production requirements for factories, and led to their disruption.
Fathi added, in exclusive statements to CNN in Arabic, that the exchange rate of the pound in banks recorded the lowest level once morest the dollar, and in the parallel market it is 2.5 pounds more than the official price, adding that there is a tendency in the parallel market to buy huge quantities of the dollar, waiting for the official price of the pound to drop. And make profits from behind the price difference.
Issa Fathi pointed out that the exchange rate of the pound once morest the dollar affected the performance of the money market, as the transactions of Arab and foreign investors decreased in the Egyptian Stock Exchange, pending the stability of the dollar’s price. It happened during the liberalization of the price of the pound in 2016, when the dollar rose until it reached more than 19 pounds, and then returned to its decline to the level of 15.5 pounds for a long time.
