The exchange rate of the US dollar against the Egyptian pound has witnessed significant fluctuations in Egyptian banks, under the flexible exchange rate system implemented by the Central Bank. This continuous price change reflects the supply and demand for foreign currency and is part of a broader package of economic reforms aimed at achieving monetary and financial stability in the country. This report highlights the latest exchange rates at major banks, along with an analysis of the overall economic context and its potential impacts.
Historical background: The decision to liberalize the exchange rate
The current exchange rate fluctuations are not a spontaneous occurrence, but rather the result of a historic decision made by the Central Bank of Egypt on March 6, 2014, to fully liberalize the Egyptian pound's exchange rate and allow it to be determined by market forces. This decision was made to address accumulated economic challenges, most notably the existence of a parallel (black) market for the dollar, where the rate differed significantly from the official rate. This led to pressure on foreign currency reserves and negatively impacted investment flows. This measure aims to eliminate the parallel market, unify the exchange rate, and increase the resilience of the Egyptian economy to external shocks. Furthermore, it is a key requirement for completing the support program with the International Monetary Fund.
Latest dollar exchange rates in Egyptian banks
Below is a list of dollar to pound exchange rates at a number of major banks, reflecting the current market dynamics:
- The Central Bank of Egypt: The buying price was recorded at 47.43 Egyptian pounds, and the selling price at 47.56 Egyptian pounds.
- National Bank of Egypt: The buying price was 47.44 Egyptian pounds, and the selling price was 47.54 Egyptian pounds.
- Bank of Egypt: The buying price remained stable at 47.44 Egyptian pounds, and the selling price at 47.54 Egyptian pounds.
- Cairo Bank: The buying price was recorded at 47.10 Egyptian pounds, and the selling price at 47.20 Egyptian pounds.
- Commercial International Bank (CIB): The buying price was 47.44 Egyptian pounds, and the selling price was 47.54 Egyptian pounds.
- Bank of Alexandria: The buying price was recorded at 47.45 pounds, and the selling price at 47.55 pounds.
- Abu Dhabi Islamic Bank: The buying price reached 47.51 pounds, and the selling price reached 47.61 pounds.
- Suez Canal Bank: The buying price rose to 47.45 pounds, and the selling price to 47.55 pounds.
The importance and expected effects of the decision
The decision to float the Egyptian pound holds strategic importance for the Egyptian economy on multiple levels. Domestically, while it may lead to a short-term inflationary wave due to the increased cost of imported goods, it will attract foreign direct investment that was previously deterred by the unrealistic currency valuation. It will also enhance the competitiveness of Egyptian exports and encourage increased domestic production. Regionally and internationally, this decision will bolster the confidence of international financial institutions and investors in the seriousness of Egypt's economic reform program, as clearly demonstrated by the signing of major investment deals such as the Ras al-Hikma project and the increased value of the International Monetary Fund loan, which will provide dollar liquidity and contribute to long-term market stability.
