The price of the dollar against the Egyptian pound witnessed a noticeable decline at the close of trading on Tuesday, in various Egyptian public and private banks, thus continuing the recovery path that the pound began after the recent package of economic measures taken by the Central Bank of Egypt.
This decline in the dollar exchange rate is a direct result of the Central Bank's decision on March 6, 2014, to fully liberalize the exchange rate, a move known as a "managed float," which allowed the pound's value to be determined by market supply and demand. This historic decision ended the existence of two exchange rates—one official at banks and the other in the parallel (black) market—thus eliminating speculation and increasing transparency in the foreign exchange market.
The economic context and the decision to liberalize the exchange rate
Before the flotation decision, the Egyptian economy faced significant challenges, primarily a shortage of foreign currency. This led to a widening gap between the official exchange rate (fixed at around 31 Egyptian pounds to the dollar) and the parallel market rate, which sometimes exceeded 70 pounds. This situation negatively impacted foreign investment and slowed economic activity. The decision to float the currency was part of a broader reform package aimed at restoring macroeconomic stability. It was supported by an agreement with the International Monetary Fund to increase the value of the loan provided to Egypt, as well as substantial investment inflows, most notably the Ras al-Hikma development deal with the United Arab Emirates, which injected significant dollar liquidity into the economy.
The importance of the pound's stability and its expected impact
The stability and depreciation of the Egyptian pound against the US dollar has multiple positive effects at the local, regional, and international levels. Locally, this stability helps curb inflation by reducing the cost of imported goods and boosts consumer and investor confidence in the Egyptian market. Regionally and internationally, the success of Egypt's economic reform program enhances its position as an attractive investment destination and underscores the economy's resilience in the face of challenges, encouraging further foreign direct investment and strengthening the confidence of international financial institutions.
The following are the details of the dollar exchange rates in the most prominent Egyptian banks today, Tuesday:
Dollar price at the Central Bank
The price of the dollar at the Central Bank of Egypt was recorded at 46.93 Egyptian pounds for buying and 47.06 Egyptian pounds for selling.
Dollar price at the National Bank
The price of the dollar at the National Bank of Egypt reached 46.96 Egyptian pounds for buying and 47.06 Egyptian pounds for selling.
Dollar price at Banque Misr
The dollar price at Banque Misr was recorded at 46.96 Egyptian pounds for buying and 47.06 Egyptian pounds for selling.
Dollar price at Alexandria Bank
The dollar price at Alexandria Bank was recorded at 46.93 Egyptian pounds for buying and 47.03 Egyptian pounds for selling.
Dollar price at Suez Canal Bank
The dollar price at Suez Canal Bank remained stable at 46.98 Egyptian pounds for buying and 47.08 Egyptian pounds for selling.
Dollar price at Commercial International Bank (CIB)
The dollar was priced at 46.94 Egyptian pounds for buying and 47.04 Egyptian pounds for selling at the Commercial International Bank.
Dollar price at Faisal Islamic Bank
The dollar price at Faisal Islamic Bank was recorded at 46.95 Egyptian pounds for buying and 47.05 Egyptian pounds for selling.
Dollar price at Abu Dhabi Islamic Bank
The dollar reached 46.98 Egyptian pounds for buying and 47.08 Egyptian pounds for selling at Abu Dhabi Islamic Bank.
Dollar price at the National Bank of Kuwait
The dollar price at the National Bank of Kuwait was recorded at 46.97 Egyptian pounds for buying and 47.07 Egyptian pounds for selling.
Dollar price at Cairo Bank
The price of the dollar at Cairo Bank reached 47.10 Egyptian pounds for buying and 47.20 Egyptian pounds for selling.
