Indeed, the pace of activity on Egypt’s black foreign exchange market has begun to slow down of late, as pages following the movement of the dollar indicate that there is a large supply, in exchange for a limited demand for the hard currency, and the surprise is that the price of the dollar against the pound offered is close to the average prices offered by Egyptian banks.
The foreign exchange market in Egypt has seen major changes since the beginning of this year. After the first quotation announced by the Central Bank of Egypt at its extraordinary meeting last March, the Egyptian currency depreciated by about 24%, after the dollar exchange rate jumped from 15.74 pounds to about 19.64 pounds on end of last October.
Read more: How much is the fair price of the Egyptian pound against the dollar?
However, since the second quotation at the end of October to date, the Egyptian currency has lost about 24.5% of its price, after the dollar exchange rate went from 19.64 pounds to about 24.45 pounds today.
As for the Egyptian pound’s total price losses from last March to the present, they amounted to about 55.3% against the dollar, after the US green note rose by about 8.71 pounds.
In his commentary, the economist, Dr. Hani Geneina, said that there is still no indication of the stability of the foreign exchange market in Egypt, especially as the crisis is linked to the abundance of dollars in the Egyptian market.
In his interview with Al-Arabiya.net, he indicated that the name of Egypt has not yet been placed on the agenda of the IMF Executive Council meetings, which indicates the possibility of a delay in the arrival of the package of funding agreed with the finance.
On the other hand, the government’s bidding program could be a differential axis: “If it is implemented quickly, we could see the disappearance of the black market by the start of the second quarter of next year,” Geneina said.
Read more: Al-Arabiya expert: core inflation in Egypt could reach 25%
As part of the regulation of the foreign exchange market, since the end of last October the Central Bank of Egypt has started implementing a flexible or controlled floating policy. However, until now, speculation on the dollar has been going on in the parallel market, although its pace has slowed down in recent days.
In parallel with the devaluation of the Egyptian pound, the Central Bank of Egypt announced the cancellation of trading under documentary credits related to the import practice, especially after the accumulation of goods in Egyptian ports, which caused shortages of some goods. The documentary credits will expire at the end of next December, according to the indications of the Central Bank of Egypt.
A few days ago, the head of the Federation of Egyptian Banks, Mohamed El-Etribi, revealed that the price increase was due to global reasons due to the Russian-Ukrainian war, and all expectations were that the fair price for the exchange of a dollar was at the level of 21 pounds.
He pointed out that banks have started handing customers the dollars needed to pull goods out of ports, stressing that the decision to raise the interest rate was an important one at this time. He stressed the importance of curbing inflation, and this will be achieved by the recent decisions of the Central Bank of Egypt.
He explained that after the recent flotation, we have seen an increase in dollar revenues in Egyptian banks, as the sums that banks received from exchange companies doubled.
