The dollar exchange rate remained stable in Egyptian banks today
The US dollar exchange rate against the Egyptian pound remained relatively stable with a slight upward bias during trading on Tuesday in Egyptian banks. This stability comes amidst the daily trading activity following the Central Bank of Egypt's historic decision to float the currency in March 2014, a move that ended a long period of currency peg and aimed to eliminate the parallel market and unify the exchange rate.
The economic context and the decision to liberalize the exchange rate
Prior to the flotation decision, the Egyptian economy suffered from increasing pressures, including a shortage of foreign currency and a widening gap between the official exchange rate at banks and the parallel (black) market rate. This negatively impacted foreign investment and led to a backlog of goods at ports. The Central Bank's decision on March 6, 2014, to allow the exchange rate to be determined by supply and demand, was a crucial step within a broader package of economic reforms. This decision coincided with a 600-basis-point interest rate hike to curb inflation, as well as the announcement of an expanded financing agreement with the International Monetary Fund and a major investment deal with the UAE to develop the Ras al-Hikma project, which injected significant dollar liquidity into the economy.
The importance of the event and its expected impact
Domestically, the liberalization of the exchange rate aims to boost investor confidence and attract foreign capital inflows, thereby supporting long-term economic growth. The unification of the exchange rate is also expected to increase remittances from Egyptians working abroad through official channels and enhance the competitiveness of Egyptian exports. However, the decision has had short-term effects on citizens, as the devaluation of the pound has triggered an inflationary wave that has impacted the prices of basic and imported goods, increasing the cost of living. Regionally and internationally, the decision has been widely welcomed by international financial institutions and trading partners, who view it as a necessary step towards achieving macroeconomic stability in Egypt, the most populous Arab country, thus reinforcing its position as a leading investment destination in the region.
Dollar exchange rates in major Egyptian banks today
The following are the details of the dollar exchange rates in a number of major banks operating in Egypt today, Tuesday:
- The Central Bank of Egypt: The buying price was recorded at 47.67 Egyptian pounds, and the selling price at 47.80 Egyptian pounds.
- National Bank of Egypt: The buying price was recorded at 47.74 Egyptian pounds, and the selling price at 47.84 Egyptian pounds.
- Bank of Egypt: The buying price was recorded at 47.75 Egyptian pounds, and the selling price at 47.85 Egyptian pounds.
- Bank of Alexandria: The buying price was recorded at 47.73 pounds, and the selling price at 47.83 pounds.
- Commercial International Bank (CIB): The buying price was recorded at 47.74 Egyptian pounds, and the selling price at 47.84 Egyptian pounds.
- Faisal Islamic Bank: The purchase price was recorded at 47.74 pounds, and the selling price at 47.84 pounds.
- Suez Canal Bank: The buying price was recorded at 47.74 Egyptian pounds, and the selling price at 47.84 Egyptian pounds.
- National Bank of Kuwait: The buying price was recorded at 47.78 Egyptian pounds, and the selling price at 47.88 Egyptian pounds.
- Qatar National Bank (QNB): The buying price was recorded at 47.72 Egyptian pounds, and the selling price at 47.82 Egyptian pounds.
- HSBC Bank: The buying price was recorded at 47.74 pounds, and the selling price at 47.84 pounds.
