The US dollar exchange rate against the Egyptian pound remained remarkably stable at the start of trading on Monday morning in Egyptian banks, both public and private. This stability comes amidst a new phase for the Egyptian economy following the Central Bank of Egypt's decision on March 6, 2024, to fully liberalize the exchange rate, a move known as "full float," aimed at eliminating the parallel market and unifying the exchange rate.
Background to the decision to liberalize the exchange rate
Prior to this decision, the Egyptian economy suffered for years from a dual exchange rate system: an official rate at banks and a significantly different rate on the parallel (black) market. This exacerbated inflationary pressures and a shortage of foreign currency. The decision to float the Egyptian pound came as part of a broader package of economic reforms, supported by an agreement with the International Monetary Fund, and aimed to restore the confidence of foreign and domestic investors and increase the economy's resilience to external shocks. This decision was preceded by significant investment inflows, most notably the Ras al-Hikma project deal with the United Arab Emirates, which provided substantial dollar liquidity that bolstered the Central Bank's ability to manage the transition to a more flexible exchange rate.
The importance of exchange rate stability and its impact
The current exchange rate stability is a positive indicator of the new monetary policy's initial success. Domestically, this stability helps curb inflation by reducing the cost of imported goods and provides businesses and importers with greater clarity for financial planning and long-term investment decisions. Regionally and internationally, a unified and flexible exchange rate enhances Egypt's attractiveness as a destination for foreign direct investment and encourages the return of remittances from Egyptians working abroad through official channels, thereby increasing the country's foreign currency reserves and supporting macroeconomic stability.
Dollar exchange rates in major Egyptian banks today, Monday
Below are the details of the dollar exchange rates in a number of major banks operating in Egypt:
- Central Bank of Egypt: 47.06 Egyptian pounds for buying, and 47.20 Egyptian pounds for selling.
- National Bank of Egypt: 47.10 Egyptian pounds for buying, and 47.20 Egyptian pounds for selling.
- Bank of Egypt: 47.10 EGP for buying, and 47.20 EGP for selling.
- Bank of Alexandria: 47.10 EGP for buying, and 47.20 EGP for selling.
- Commercial International Bank (CIB): 47.10 EGP for buying, and 47.20 EGP for selling.
- Suez Canal Bank: 47.08 Egyptian pounds for buying, and 47.18 Egyptian pounds for selling.
- Abu Dhabi Islamic Bank: 47.12 Egyptian pounds for buying, and 47.22 Egyptian pounds for selling.
- Faisal Islamic Bank: 47.10 EGP for buying, and 47.20 EGP for selling.
- Cairo Bank: 47.10 EGP for buying, and 47.20 EGP for selling.
- National Bank of Kuwait: 47.05 Egyptian pounds for buying, and 47.15 Egyptian pounds for selling.
Analysts and markets are closely monitoring the performance of the Egyptian pound, as its current stability is seen as a crucial step towards achieving a sustainable economic recovery.
