The US dollar exchange rate against the Egyptian pound remained remarkably stable at the close of trading on Monday in Egyptian banks, continuing the relative calm that has prevailed in the foreign exchange market recently. This stability follows the historic move by the Central Bank of Egypt in March 2014 to fully liberalize the exchange rate, a decision that reshaped the local economy and opened the door to significant foreign currency inflows.
General context: From the parallel market to a flexible exchange rate
Before the decision to float the Egyptian pound, the Egyptian economy suffered for years from a dual exchange rate system: an official rate at banks and a much higher rate on the parallel market (black market). This situation led to a buildup of demand for dollars, created uncertainty among investors, and negatively impacted the availability of essential and imported goods. The Central Bank's decision on March 6, 2014, was a decisive step to eliminate the parallel market and unify the exchange rate, allowing the pound to fluctuate freely according to supply and demand mechanisms. This decision coincided with a significant increase in interest rates to curb inflation and attract foreign investment in local debt instruments.
The importance of current stability and its economic impact
The current stability of the exchange rate is a positive indicator of the success of recent monetary policies. Domestically, this stability contributes to controlling inflation rates, as the cost of importing goods and raw materials decreases, which is gradually reflected in consumer prices. It also provides a clear outlook for both local and foreign investors, encouraging new investments now that the risks of sharp currency fluctuations have subsided. Regionally and internationally, this stability has bolstered the confidence of international institutions in the Egyptian economy, as evidenced by the completion of a comprehensive agreement with the International Monetary Fund and the influx of substantial investments, most notably the Ras al-Hikma deal with the UAE, which provided urgent dollar liquidity that supported Egypt's foreign currency reserves.
Dollar exchange rates in major Egyptian banks today, Monday
Below are the details of the dollar exchange rates in a number of Egyptian banks at the end of trading today:
- Central Bank of Egypt: 47.01 Egyptian pounds for buying, and 47.14 Egyptian pounds for selling.
- National Bank of Egypt: 47.02 Egyptian pounds for buying, and 47.12 Egyptian pounds for selling.
- Bank of Egypt: 47.02 EGP for buying, and 47.12 EGP for selling.
- Bank of Alexandria: 47.02 EGP for buying, and 47.12 EGP for selling.
- Commercial International Bank (CIB): 47.02 EGP for buying, and 47.12 EGP for selling.
- Suez Canal Bank: 47.03 Egyptian pounds for buying, and 47.13 Egyptian pounds for selling.
- Abu Dhabi Islamic Bank: 47.03 Egyptian pounds for buying, and 47.13 Egyptian pounds for selling.
- Faisal Islamic Bank: 47.02 pounds for buying, and 47.12 pounds for selling.
- Cairo Bank: 47.25 EGP for buying, and 47.35 EGP for selling.
- National Bank of Kuwait: 46.89 Egyptian pounds for buying, and 46.99 Egyptian pounds for selling.
