Cairo - Decypha: Economists are expecting the US dollar to continue with its recent upward trend that began a week ago, as the USD exceeded the level of EGP 18.

The dollar continuous upsurge is expected as demand increases with Ramadan approaching, USD flows declining, and anticipation remains towards the US Federal Reserve's decision regarding US interest rates in its next meeting on 15 March.

In recent weeks, exchange rates saw some intense fluctuations. Despite the Egyptian pound's gains in February, it then declined rapidly, losing 10% of its value in the first week of March.

On Tuesday, the exchange rate of the dollar averaged EGP 17.4 for buying, and EGP 17.51 for selling, as shown by data of the Central Bank of Egypt (CBE).

The head of the research department in Pharos Holding, Radwa El-Swaify, said that the dollar will continue to rise in the upcoming period, most likely exceeding the barrier of EGP 18, and then moving between EGP 17 and EGP 19 until the end of this year or the beginning of 2018.

El-Swaify attributed the recent rise of the pound to low demand, with another reason being the decline of the USD in global markets.

Israa Ahmed, macroeconomics analyst in Mubasher International, told Decypha that the expected increase in the US interest rates in mid-March will only have a minor effect on exchange rates; however, it could have negative impacts on the volume of liquidity that is expected to be pumped into emerging markets.

The dollar's fall in February was reflected on foreign investments in Egyptian debt instruments, as investors awaited the bounce of the USD, as the black market regained its activity. This reduced supply against demand, eventually leading the banks to raise the rate to attract more dollar flows, analyst Noaman Khaled of CI Capital explained.

Khaled expects the dollar to maintain the levels near EGP 17.5 in the short-term, expecting it to reach EGP 15.80 to EGP 16 by mid-2017, before targeting EGP 16 to EGP 16.5 by the year end.