Corona frightens the Egyptian pound … and expectations to record 17 pounds for the dollar

Since the beginning of 2019, the Egyptian pound has managed to exceed analysts’ expectations to turn into the second strongest currency against the dollar globally during the past year, according to international reports.

These gains forced analysts in research institutions to change their future perception of the pound against the dollar according to performance on the ground, and some predicted that the dollar would record 13 pounds during the current year 2020.

But it seems that Corona, as it confused the whole world and caused economic crises, closed borders and travel suspension, had its role with the Egyptian pound, which began to decline significantly against the dollar, so that the analysts returned to adjust their expectations again.

Before Corona and at the beginning of this year, investment banks had developed exchange rate assessments ranging from 16 to 17.5 pounds per dollar, despite good economic indicators.

The pound rose 3.07% against the US currency in less than two months from 2020, continuing the performance achieved in 2019 and losing the dollar about 11% of its value.

Central bank officials attributed the Egyptian pound’s hikes to cash flows that reached $ 12 billion since the beginning of the year until mid-February, which came from a variety of sources, both from remittances from Egyptians working abroad, indirect investments, and tourism revenues.

But since last week alone, the pound lost about 10 piasters to the dollar, especially in light of the announcement of the exit of foreigners from local debt instruments at relatively large rates since the beginning of this month, some people estimate at about 6 billion dollars in light of the lack of official announcement of the numbers.

Radwa Al-Swaify, Head of Research Sector at Pharos Holding, believes that the coming period will witness a remarkable fluctuation of the pound, and may reach the price of 17 pounds per dollar.

She added that she returned to her previous expectations, which she announced at the beginning of this year, which is the price of 16.25 pounds for the dollar as an average exchange rate during the current year 2020.

As for Abu Bakr Imam, head of research at Sigma Capital, he believes that the pound will retreat against the dollar according to international conditions and the exit of foreigners from the markets, including the Egyptian market, but it is not possible to determine the price that can be reached, especially since the figures have not been announced and we also do not know the extent of the outbreak.

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