A number of exchange market experts asserted that the U.S. dollar has recorded an increase in a week ranging between 3 and 4 piasters against the Egyptian pound. The U.S. currency started the week trading at EGP 6.16 (buy price) and EGP 6.18 (sell price) to eventually end at EGP 6.21 (sell price) on Thursday.
Experts hold widely differing views on the Central Bank’s ability to issue a decree targeting the national currency support.
It is worth notin g that the CBE Governor Farouk El-Okdah has held a meeting with the chairmen of the Egyptian banks to discuss the sudden rise of the U.S. currency against the Egyptian pound.
Some experts believed that the CBE will not be able to inject dollar liquidity for the meantime due to a number of existing priorities such as opening up Letters of Credit to import food commodities.
On the other hand, other experts see that the CBE intends to inject dollar liquidity for the purpose of rebalancing the pound’s exchange price against dollar especially after the latter had rose to an eight-year high since El-Okdah has hold the CBE governor office.
Mohamed Hassan El-Abyad – head of the Foreign Exchange Section at the Federation of Egyptian Chambers of Commerce – said the recent hike due to the reduction in the dollar supply in the market during the previous week; while there was increasing demand on buying dollars.
“Due to the current political and economic situation, the citizens rushed to turn their funds to dollars amid the Egyptian Pound’s devaluation rumors.” El-Abyad added
“It is quite hard to expect whether the U.S. dollar will continue to rise or not as the exchange price relies on the demand and supply factor.”
He also stated that the CBE will not be able to pump dollar liquidity for the meantime as the bank has a number of top priorities on its agenda such as opening up Letters of Credit to import food commodities.
“The banks have other sources in which they would manage to fill their dollar deficit.”
