The Saudi riyal saw a notable rise against the Egyptian pound at the close of trading today in Egyptian banks, amid ongoing changes in the exchange market following the Central Bank of Egypt's decision to fully liberalize the exchange rate in March 2024. This decision, aimed at eliminating the parallel market and unifying the exchange rate, led to a revaluation of the local currency against a basket of foreign currencies, including the Saudi riyal, which holds particular importance in the Egyptian market.
Background of exchange rate liberalization and its impact on currencies
This movement in the riyal's exchange rate comes as part of the repercussions of the new monetary policy pursued by the Central Bank of Egypt. In a historic move, the Egyptian pound's exchange rate was allowed to be determined by market supply and demand mechanisms, leading to a depreciation of its initial value. This move aims to attract foreign direct and indirect investment and enhance the competitiveness of Egyptian exports. The Saudi riyal is closely pegged to the US dollar, meaning that any change in the pound's exchange rate against the dollar is directly reflected in its exchange rate against the riyal.
The importance of the Saudi Riyal exchange rate to the Egyptian economy
The Saudi riyal's exchange rate is crucial for Egyptians in several vital ways. First, remittances from Egyptians working in Saudi Arabia are a major source of foreign currency for Egypt. A stronger riyal means these remittances are more valuable when converted to Egyptian pounds, thus boosting the incomes of Egyptian families. Second, the exchange rate directly impacts the costs of Hajj and Umrah pilgrimages, as all fees and services in Saudi Arabia are paid in riyals. Therefore, a stronger riyal increases the financial burden on Egyptian pilgrims. Finally, the exchange rate affects bilateral trade between the two countries, as Saudi Arabia is a significant trading partner for Egypt.
Saudi Riyal exchange rates in major Egyptian banks today
The exchange rates of the Saudi Riyal varied from bank to bank. Below is a list of the latest recorded buying and selling rates:
- Central Bank of Egypt: 12.76 Egyptian pounds for buying, and 12.80 Egyptian pounds for selling.
- National Bank of Egypt: 12.72 Egyptian pounds for buying, and 12.79 Egyptian pounds for selling.
- Bank of Egypt: 12.72 Egyptian pounds for buying, and 12.79 Egyptian pounds for selling.
- Bank of Alexandria: 12.75 EGP for buying, and 12.79 EGP for selling.
- Commercial International Bank (CIB): 12.74 EGP for buying, and 12.79 EGP for selling.
- Faisal Islamic Bank: 12.72 Egyptian pounds for buying, and 12.79 Egyptian pounds for selling.
- Suez Canal Bank: 12.71 Egyptian pounds for buying, and 12.80 Egyptian pounds for selling.
- National Bank of Kuwait: 12.64 Egyptian pounds for buying, and 12.92 Egyptian pounds for selling.
- Qatar National Bank (QNB): 12.68 Egyptian pounds for buying, and 12.79 Egyptian pounds for selling.
- HSBC Bank: 12.77 pounds for buying, and 12.80 pounds for selling.
The exchange rate of the Saudi riyal and other currencies is expected to continue to move based on foreign exchange flows and the supply and demand situation in the Egyptian banking market, under close monitoring by both investors and citizens.
