By: Mahmoud Salah and Heba Al-Kordi

Cairo - Mubasher: The Egyptian Pound defied expectations of falling against the US Dollar since the Central Bank of Egypt’s (CBE) decision to free the exchange rate on 3 November.

The pound went up 4.8% on Monday compared to its price at the year beginning, as shown by the data of the CBE.

The dollar fell under the level of EGP 17 on Monday’s trade in Egyptian banks, registering EGP 16.95 to 17.6 for buying, and EGP 17.05 to 17.7 for selling.

Analysts attributed this to the recent dollar flows from international debt instruments, as well as the importing recess for the Chinese New Year holiday, with some analysts noting that it could have resulted from speculations, or might be a temporary rise due to the market’s slump in January and February.

Hani Farahat, analyst at CI Capital, told Mubasher that the rise of the Egyptian pound is due to the foreign investments treasury bonds and bills and the activity in the banking sector.

Farahat added that fluctuations are normal in the first months of floating currency, noting that the current rise is not a sign of a continuous trend, and that for the pound to keep its gains some improvements are needed in different fields such as the investment and the tourism sectors.

Rami Orabi, the macroeconomics analyst at Pharos, said that the last period saw an improvement in foreign currency liquidity levels in banks, especially with the increase in transfers from abroad.

Foreign investments in the Egyptian Exchange (EGX) as well as treasury bills and bonds totalled around $2.5 billion in the last three month, with the increase in foreign reserves, which was accompanied by a the dollar decline globally, Orabi added.