Dubai, United Arab Emirates (CNN) – The price of the dollar has rebounded against the Egyptian pound in the parallel market, ranging from 38.5 to 40 pounds, according to dealers, after a stability of about two months. Experts attributed the reasons for the rise of the dollar again on the black market to renewed talk of a new devaluation of the local currency, with a possible review by the International Monetary Fund of the loan extended to Egypt during the next month.
The exchange rate of the pound decreased against the dollar by double its value, to drop from the level of 15.5 pounds from March 2022 to 30.82 pounds for purchase at the Central Bank of Egypt, as a result of Egypt’s lack of foreign exchange resources affected by the exit of indirect foreign investments after raising interest globally, and the high bill for importing goods. Basic after the outbreak of the Russian-Ukrainian war.
Banking expert Mohamed Abdel-Al said that the parallel market witnessed a movement in the price of the dollar against the pound, to reach 40 pounds, due to two factors; The first is the rise in global gold prices, which led to a re-increase in demand for the yellow metal, and the second is the increase in oil prices to exceed $86 a barrel and approach the level of $90, which is reflected in an increase in fuel prices locally soon, as well as the demand for foreign exchange.
However, he pointed out that the parallel market is not regulated, and is controlled by currency dealers and “dollarization” tycoons, in addition to dollar seekers to pay import documentary credits, and therefore there are no specific standards that govern prices or their movements.
Egypt’s monetary reserves lost more than $9 billion after the outbreak of the Russian-Ukrainian war, dropping from a level exceeding $40 billion to $33 billion, before gradually rising again with simple values over a period of 11 months, to reach $34.9 billion at the end of last July.
Abdel-Al pointed out, in exclusive statements to CNN in Arabic, to the role of the reports of international rating institutions, which call for the necessity of devaluing the pound against the dollar, in their reflection on the movement of hard currency in the parallel market, despite the fact that Moody’s last report gave Egypt an additional 3 months to review its credit rating.
Egypt agreed with the International Monetary Fund, in October of last year, to obtain a loan of $3 billion from the Fund, and received the first tranche of it, at a value of $350 million. The procedures for the first tranche were scheduled to be reviewed in March to disburse the second tranche, before this review was postponed to next September.
Mohamed Abdel-Al indicated that there was no significant movement in the price of the dollar against the Egyptian pound in the official market, in order not to bear more burdens on citizens. The parallel market for the dollar.
And last June, Egyptian President Abdel Fattah El-Sisi stated, during the National Youth Conference in Alexandria, his refusal to completely liberalize the exchange rate of the pound so as not to cause harm to Egypt’s national security, as he put it, and his statements were followed by a 10% decline in the dollar. on the black market.
Banking expert, Mohamed Abdel-Aal, confirmed that solving the foreign exchange shortage crisis in Egypt requires increasing its dollar resources in the short and long term, whether through the rapid sale of government assets, the continued growth of tourism revenues significantly, and the attraction of foreign direct investment, and in this case it may President Sisi is moving to implement a flexible exchange rate system, and the pound will fall by 15-20%.
The Egyptian government aspires to increase its hard currency resources to $191 billion by 2026 by increasing commodity exports to $88 billion, collecting $20 billion from tourism, $45 billion from remittances from Egyptians abroad, $13 billion in foreign direct investment, and $17 billion from foreign exchange. Revenues from the Suez Canal and the maritime services sector, and 9 billion from outsourcing services, according to official statements by Prime Minister Mostafa Madbouly.
For his part, Nagy Farag, advisor to the Minister of Supply for the gold industry, said that the price of gold in Egypt rose by more than 200 pounds ($6.46) within 48 hours, from 2150 pounds ($69.4) to 2410 pounds ($77.79) per gram of 21 carat. – which is the best seller – as a result of a sudden increase in demand, especially for bars and pounds.
The Egyptians bought 18.6 tons of gold bars and coins during the first half of 2023 – according to data from the World Gold Council – which is the largest amount of gold they have bought since the council tracked the gold market.
Faraj added, in exclusive statements to CNN in Arabic, that the initiative to exempt those coming from abroad from customs duties on gold from abroad contributed to the entry of huge quantities amounting to about 600 tons, which led to calm prices again in the gold market, so that the price of a gram of 21 carat decreased by 70. EGP ($2.26) from yesterday to reach EGP 2330 ($75.21), expecting price stability to return within the next few days.
On May 11, the Egyptian Cabinet approved exempting Egyptians coming from abroad from customs tax and fees on gold for a period of 6 months. As a result, Egyptian gold purchases tripled during the second quarter of this year, reaching 10.4 tons.
2023-08-13 19:52:36
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