within hours of the announcement International Monetary Fund With the approval of the financing package for the third phase of the reform program led by the Egyptian government, the dollar’s exchange rate continued its decline in the parallel market, posting losses of more than 30 percent.
He mentioned resellers and resellers in Black market In Egypt, the dollar exchange rate fell from £38 in morning trading on Friday 16 December to £29 in late trading on Sunday 18 December, so that the US green paper lost about nine pounds of its value, a decrease of about 31 percent against the Egyptian pound.
And the Egyptian government has revealed, according to a recent statement, that the deal approved by the fund’s board will provide an additional package of external finance for Egypt through a variety of international and regional institutions, as well as through global financial markets. The agreement provides for the possibility for the Egyptian state to apply for additional funding through the recently created Resilience and Sustainability Fund within the International Monetary Fund.
The dollar stabilizes against the pound
And in the official foreign exchange market, the exchange rates of the dollar against the Egyptian pound remained stable in Egyptian banks. The dollar’s exchange rate has experienced significant movement against the pound recently, when it has risen between 50 and 60 piasters over the past 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 – Egypt” recorded a level of 24.65 pounds for buying and 24.72 pounds for selling, and in the “Egyptian Gulf Bank” recorded 24.69 pounds Buy and £24.72 Sell.
And at the Central Bank of Egypt, average dollar prices against the Egyptian pound registered £24.63 buying and £24.71 selling.
As regards the main currencies, the single European currency (the euro) recorded a decline of between 15 and 5 piasters in trading in Egyptian banks. At the National Bank of Egypt and Banque Misr, the euro exchange rate reached £26.05 in buying and 26.29 in selling. At the Central Bank of Egypt, the euro exchange rate stabilized at 26.15 pounds for purchases and 26.24 for sales.
The British pound saw a sharp decline between 60 and 50 piasters in trading in Egyptian banks. At the National Bank of Egypt and Banque Misr, the rate of the pound sterling recorded a level of £29.82 buying and £30.14 selling, while the Central Bank of Egypt reached a level of £30.34 in buying and 30.44 selling.
In the Arab world, the Saudi riyal exchange rate at the National Bank of Egypt and Banque Misr recorded a level of £6.54 for buying and £6.55 for selling, and the exchange rate for the dirham of The UAE reached a level of £6.70 for buying and £6.71 for selling. The exchange rate of the Kuwaiti dinar recorded a level of £77.42 buying and £80.46 selling, according to the National Bank.
Positive signal for foreign markets
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 IMF.
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.
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The Egyptian government has indicated that the fund’s board of directors’ approval of the expert report it agreed with the Central Bank of Egypt last October, without any additional conditions or charges, but adds a new certificate of confidence to the Egyptian economy , and also gives a positive signal for local and foreign markets, and gives a strong impetus to encourage investment, export and international trade movement 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 external, which have recently increased in intensity and frequency globally. The broad national program of economic reforms for Egypt also includes an important axis linked to the strengthening of social safety nets in order to guarantee their effectiveness and pertinence.
The new program should achieve the highest degree of protection for the vulnerable classes. The reform program also envisages an acceleration of efforts to increase the competitiveness of the Egyptian economy through the adoption of an integrated and coherent package of policies, measures and structural reforms that allow for a path to high and sustainable growth, driven by a greater role and contribution of the private sector, to ensure the creation of productive and sufficient employment opportunities.
Goods stacked in ports
Despite the lack of sufficient availability of the dollar on the official market to meet the needs of the local market, the crisis is expected to see a major turning point in the coming days, especially as the reason for the escalation of the crisis is directly due to the increase of the volume of goods stored in Egyptian ports, pending the expiry of their documentary credits.
According to data from the Central Bank of Egypt, the documentary credits, previously approved at the beginning of the year, will expire at the end of this December, as part of the moves by the government and the Central Bank to legalize import operations and stop the ” import madness” that was causing the hard currency to drain the country’s resources.
According to unofficial estimates, the value of goods stored in Egyptian ports exceeds $6 billion and the Egyptian government is expected to receive financing tranches worth more than $1.5 billion this December, both from the International Monetary Fund and partners international. It is also likely that the Central Bank of Egypt will announce its intervention by pumping dollar liquidity through periodic weekly offers, to cover the banks’ dollar needs and finance import operations.
