2023-12-24 07:30:02
Despite the stability of the dollar exchange rates on the official market for more than a year in Egypt, the parallel market recorded strong activity during the past hours, which pushed the dollar exchange rate to record historical levels.
According to traders, the black market has witnessed a significant increase in demand for the dollar. Several transactions took place at the level of 51.50 pounds to the dollar, but they took place within limited ranges and through more than one intermediary as the authorities continued to clamp down on speculation and major currency traders.
On the other hand, the exchange rate of the dollar continued to remain stable once morest the Egyptian pound in the official market. In the two largest local banks in terms of assets and transactions, the dollar exchange rate stabilized at the level of 30.75 pounds for purchase and 30.85 pounds for sale, the National Bank of Egypt and Banque Misr, while the Commercial International Bank – Egypt recorded a level of 30.85 pounds for purchase and 30.95 pounds for sale. At the Central Bank of Egypt, the American green note recorded a level of 30.84 pounds for purchase and 30.93 pounds for sale.
While the market was waiting for the Central Bank of Egypt to announce new decisions that included increasing interest rates and beginning intervention in the exchange market, the Monetary Policy Committee decided during its meeting at the end of last week to stabilize interest rates for the third time in a row.
It was decided to maintain the overnight deposit and lending rates and the central bank’s main operation rate at 19.25%, 20.25% and 19.75%, respectively. The credit and discount rates were also maintained at 19.75%.
A few days ago, Moody’s Analytics had suggested a new devaluation of the Egyptian pound as the government moved to implement a flexible exchange rate system in a gradual manner, which would lead to average inflation remaining above 24% next year and high interest rates.
Moody’s analysts
Moody’s analysts stated that Egypt’s economic problems result from long-standing structural challenges such as food insecurity, large population growth, and financial and external imbalances. They pointed out that the deficit in both the budget and the current account balance caused the growth of public and external debt.
Despite the stability of the dollar exchange rates in the official market in Egypt, a recent report suggested that the dollar exchange rate would reach the level of 45 pounds during the first quarter of 2024. HSBC Bank estimates indicate a reduction in the Egyptian pound’s exchange rate to a level Between 40 and 45 pounds to the dollar during the first quarter of 2024, compared to its previous expectations, which were between 35 to 40 pounds.
He pointed out in a recent report that the exchange rate of the pound in Egypt has been stable for months in official transactions at 30.9 pounds per dollar, following devaluing the currency three times since March 2022, while its price on the black market recorded a level of 50 pounds to the dollar.
He stressed that adjusting the exchange rate of the Egyptian pound comes as part of the shift towards a more flexible exchange rate system, and facilitates the completion of the first review of the reform program supported by the International Monetary Fund.
1703404742
#Violent #speculation #drives #black #market #dollar #levels #Egypt
