The Saudi riyal exchange rate against the Egyptian pound remained relatively stable with slight fluctuations at the close of trading on Monday, December 1st, across various Egyptian public and private banks. This stability follows a period of significant volatility in the Egyptian foreign exchange market, particularly after the Central Bank of Egypt's decision to fully liberalize the exchange rate in March 2014, a move that reshaped the landscape of foreign currency exchange rates against the Egyptian pound.
Background and impact of the decision to liberalize the exchange rate
Prior to March 2024, the Egyptian economy faced significant challenges, primarily the existence of two exchange rates: an official rate at banks and a parallel (black) market rate with a substantial difference. This situation led to a severe shortage of foreign currency and negatively impacted imports and foreign investment. To address these challenges, the Central Bank made the historic decision to float the Egyptian pound, allowing its value to be determined by market supply and demand. This decision resulted in an immediate devaluation of the pound, but it also helped eliminate the parallel market and unify the exchange rate, thereby enhancing transparency and attracting foreign direct investment that had been awaiting greater economic clarity.
The importance of the Saudi Riyal exchange rate to the Egyptian economy
The Saudi riyal exchange rate is of particular importance to Egyptians for several reasons. First, Saudi Arabia hosts the largest Egyptian expatriate community, numbering in the millions. These workers send substantial remittances to their families in Egypt, and these remittances are one of the country's most important sources of foreign currency. Consequently, the exchange rate directly impacts the actual value of these remittances upon their arrival in Egypt. Second, the Saudi riyal is closely pegged to the Egyptian pound due to the Hajj and Umrah pilgrimage seasons, during which hundreds of thousands of Egyptians travel to the holy sites annually, creating significant seasonal demand for the riyal.
Details of Saudi Riyal exchange rates in Egyptian banks today, Monday
The following is a list of Saudi Riyal exchange rates in a number of Egyptian banks at the end of trading today:
- The Central Bank of Egypt: The buying price was recorded at 12.65 Egyptian pounds, and the selling price at 12.68 Egyptian pounds.
- National Bank of Egypt: The buying price was recorded at 12.62 Egyptian pounds, and the selling price at 12.69 Egyptian pounds.
- Bank of Egypt: The buying price was 12.62 Egyptian pounds, and the selling price was 12.69 Egyptian pounds.
- Bank of Alexandria: The buying price was recorded at 12.65 Egyptian pounds, and the selling price at 12.69 Egyptian pounds.
- Commercial International Bank (CIB): The buying price was recorded at 12.64 Egyptian pounds, and the selling price at 12.69 Egyptian pounds.
- Abu Dhabi Islamic Bank: The purchase price was recorded at 12.66 pounds, and the selling price at 12.70 pounds.
Regional and international impact
Regionally, the stable exchange rate between the two countries reflects the strength of economic and trade relations between Egypt and Saudi Arabia, with the Kingdom being one of Egypt's largest trading partners and investors. Internationally, Egypt's successful implementation of its economic reform program, of which liberalizing the exchange rate is a cornerstone, strengthens the confidence of international financial institutions such as the International Monetary Fund and the World Bank, and opens the door to further financing and investment to support economic growth.
