A state of confusion and extreme caution dominated dollar traders and traders in the parallel foreign exchange market in Egypt. In late trading on Sunday, the dollar’s exchange rate continued to fall off the official market to as low as £29, down from £38 in last Friday’s trading.
Sales posts dominated pages monitoring exchange rates on social media platforms, as small traders quickly began their moves to get rid of the dollars they had in anticipation of continuing price drops.
Read more: Egypt’s black market for the dollar… is it fading?
These losses come despite the lack of intervention by the Central Bank of Egypt thus far, but are directly linked to the announcement of the approval of the Executive Board of the International Monetary Fund for the financing package for Egypt.
In the official foreign exchange market, the exchange rates of the dollar against the Egyptian pound have stabilized in Egyptian banks. The exchange rate of the dollar has experienced a significant movement against the Egyptian pound during the last period, having risen between 50-60 piasters in the last month.
Across the two largest banks by assets and transactions, the dollar rate at the National Bank of Egypt and Banque Misr recorded a level of £24.61 buying and £24.66 selling. In private banks, the dollar exchange rate in the Commercial International Bank of Egypt recorded a level of 24.65 pounds for buying and 24.72 pounds for selling, and in the Egyptian Gulf Bank it recorded 24.69 pounds for purchase and £24.72 for sales.
And at the Central Bank of Egypt, average dollar prices against the Egyptian pound registered £24.66 buying and £24.74 selling.
The black market is expected to see further declines in the dollar exchange rate in the coming days, especially as expectations indicate that the Central Bank of Egypt intends to issue several decisions that will reduce the demand for dollars outside the official market, especially after the arrival of the first tranche of financing from the International Monetary Fund.
Read more: How will the IMF loan approval affect the Egyptian economy?
According to a recent statement, the Egyptian cabinet revealed that the agreement approved by the fund’s board and the accompanying financing for the Egyptian authorities will allow for an additional package of external financing through a variety of international and regional institutions, as well as through markets financial. The agreement provides for the possibility for the Egyptian state to request additional funding through the new “Resilience and Sustainability Fund” of the International Monetary Fund.
The endorsement by the International Monetary Fund of the comprehensive national economic reform program is further confirmation of the support of the international community and development partners for Egypt’s economic reform programme, and also reflects confidence in Egypt’s ability to fulfill its international obligations and in its ability to achieve projected rates of economic growth.
The Egyptian cabinet has indicated that the approval by the fund’s board of the expert report, agreed with the Egyptian government and the Central Bank of Egypt last October, without any additional conditions or burdens, adds to the Egyptian economy a new certificate of trust and also gives a positive signal to local and foreign markets, and gives a strong impetus to encourage investments, exports and international trade with Egypt.
Egypt’s comprehensive and national economic reform program aims to strengthen macroeconomic stability and ensure public debt sustainability in the medium term, as well as work to improve the resilience, resilience and capacity of the Egyptian economy to cope with shocks externalities, which have recently increased in intensity and recurrence globally. Egypt’s comprehensive national economic reform agenda also includes an important axis related to strengthening the social safety net so as to ensure its effectiveness and goal.
