By: Eslam Fadl
Cairo – Mubasher: The Egyptian pound has risen against the US dollar on the back of investors’ interest in local sovereign debt instruments, the Egyptian Exchange (EGX), the increase in remittances from expatriate Egyptians, added to positive indicators of Egypt’s economic recovery.
The EGP exchange rate against USD has risen, beating projections by the Central Bank of Egypt (CBE) governor Tarek Amer who had said that it was witnessing a period of volatility.
The USD/EGP exchange rate witnessed a relative decline in a number of banks on Sunday at ranges between 10 and 20 piasters.
Amer previously told Bloomberg that the USD/EGP exchange rate would see further volatility over the coming days, following the shutdown of the system allowing foreign investors to repatriate dollars.
The USD exchange rate at the CBE fell by 20 piasters for selling and by 22.2 piasters for buying, registering EGP 17.7697 and EGP 17.6303, respectively on Sunday, versus EGP 17.9743 and EGP 17.8553 last Wednesday.
Yehia Abu El-Fotouh, deputy chairman of the National Bank of Egypt (NBE), attributed the drop in the USD exchange rate to foreign investors' high demand for Egypt’s debt instruments.
The USD/EGP exchange rate has been falling since the beginning of the week due to the increase in dollar inflows from foreign investors since the start of January, Abu El-Fotouh added.
In the meantime, national banks have a surplus in US dollar holdings, which has helped boost the Egyptian pound's value against the greenback, he stressed.
Remittances from expatriate Egyptians, tourism revenues, exports, and diversification of financing sources have also contributed to the fall in the USD exchange rate against the local currency, he highlighted.
In the same vein, a banking source said that the USD/EGP pair had fallen by 20 piasters since the beginning of this week on the back of foreign investments in Egypt’s stock market and debt instruments.
The International Monetary Fund’s (IMF) recent positive report on the recovery of Egypt’s economy has boosted foreign investors’ confidence in Egyptian sovereign debts and the local bourse, the source said.
IMF managing director Christine Lagarde has called for maintaining economic reforms in Egypt, indicating that the North African country was on the right track.
A group of analysts agreed that the recent comments from CBE governor Tarek Amer have positively reflected on the Egyptian banking sector.
Translated by: Mai Ezz El-Din