The Central Bank of Egypt revealed that it will adopt a flexible exchange rate system, giving priority to the main objective of achieving price stability. He explained that the exchange rate of the value of the Egyptian pound once morest other foreign currencies will change according to the forces of supply and demand. The exchange rate of the dollar in some banks jumped to the level of 23 pounds.
The Central Bank of Egypt said that it will work to build and develop the financial derivatives market with the aim of deepening the foreign exchange market and raising levels of foreign liquidity.
The central bank indicated that the exchange rate will reflect the value of the pound once morest other currencies through the forces of supply and demand, within the framework of a flexible exchange system, with priority given to the central objective of achieving price stability. He stressed that reform measures have been taken in light of the foregoing to ensure macroeconomic stability and achieve sustainable and comprehensive economic growth.
The Monetary Policy Committee of the Central Bank of Egypt had decided, during an exceptional meeting, to raise the interest rate by 200 basis points, by 2%. The Central Bank of Egypt clarified that it was decided to raise the overnight deposit and lending rates and the main transaction price by 200 basis points to reach 13.25%, 14.25% and 13.75%, respectively. It was also decided to raise the credit and discount rate by 200 basis points to reach 13.75%.
In the exchange market, the dollar exchange rate recorded the highest level for 8 banks led by the National Bank of Kuwait, “HSBC”, the National Bank of Egypt and Commercial International Egypt, at levels ranging from 22.10 pounds to 22.45 pounds.
While the exchange rate of the US green paper at the Central Bank of Egypt stabilized at the level of 19.66 pounds for purchase, compared to 19.77 pounds for sale.
Today, Thursday, Refinitiv data indicated that the price of the Egyptian pound once morest the dollar touched its lowest level ever at 22.5 pounds, following the Central Bank of Egypt decided to raise the interest rate by 200 basis points.
By 08:09 GMT, the price of the dollar in Egypt recorded 22.5 once morest the pound.
In a related context, economic expert Dr. Hani Genena expected, in an interview with Al-Arabiya, today, Thursday, that a full float of the Egyptian pound exchange rate once morest the dollar would take place, bringing its price to regarding 24 or 25 pounds to the dollar.
Geneina added that the sudden liberalization of the exchange rate, which is expected to occur within a few minutes, is always accompanied by raising interest rates to prevent dollarization and encourage banks to offer savings tools, and this coincides with the National Bank offering a 3-year savings certificate at a return rate of 17.25%.
Geneina confirmed that he expects a full float of the exchange rate, noting that the central bank may have agreed with the International Monetary Fund on a limited intervention in the exchange rate using part of the foreign reserves while maintaining a minimum reserve, and the intervention may be regarding one billion dollars, as there will be fluctuation in the price of Exchange throughout the session.
