The exchange rate of the Saudi riyal against the Egyptian pound saw slight fluctuations at the close of trading on Sunday in Egyptian public and private banks, settling at levels close to last week's closing rates. This relative stability reflects the prevailing anticipation in the Egyptian foreign exchange market following the recent economic decisions made by the Central Bank of Egypt.
Economic background: Exchange rate liberalization and its impact
This stability in the Saudi riyal's exchange rate, which is directly pegged to the US dollar, follows the Central Bank of Egypt's decision in March 2024 to fully float the Egyptian pound, allowing its value to be determined by supply and demand. This decision was a crucial step aimed at eliminating the parallel currency market and unifying the exchange rate. Initially, the pound experienced a significant depreciation before beginning to find a new equilibrium. Since then, markets have been closely monitoring the pound's performance against a basket of major currencies, with the Saudi riyal considered a key indicator given the close economic ties between the two countries.
The importance of the Saudi Riyal exchange rate to the Egyptian economy
The Saudi riyal's exchange rate is of paramount importance due to its direct link to vital sources of income for Egypt. Saudi Arabia hosts the largest Egyptian expatriate community, and remittances from Egyptians working in the Kingdom are a major source of foreign currency for Egypt. Consequently, the exchange rate directly impacts the actual value of these remittances when they reach Egyptian families, making it a matter of daily concern for millions. Furthermore, the riyal's value is tied to the costs associated with the Hajj and Umrah pilgrimages, which hold significant spiritual and economic importance for Egyptians.
Details of the Saudi Riyal exchange rate in major Egyptian banks
The following is a presentation of the Saudi Riyal exchange rates against the Egyptian Pound in a number of banks at the end of trading on Sunday, which showed a convergence in buying and selling prices with slight differences:
- The Central Bank of Egypt: The buying price was recorded at 12.50 Egyptian pounds, and the selling price at 12.54 Egyptian pounds.
- National Bank of Egypt: The buying price was 12.46 Egyptian pounds, and the selling price was 12.54 Egyptian pounds.
- Bank of Egypt: The buying price remained stable at 12.46 Egyptian pounds, and the selling price at 12.54 Egyptian pounds.
- Bank of Alexandria: The buying price was recorded at 12.49 Egyptian pounds, and the selling price at 12.54 Egyptian pounds.
- Commercial International Bank (CIB): The buying price was 12.49 Egyptian pounds, and the selling price was 12.54 Egyptian pounds.
- Faisal Islamic Bank: The purchase price was recorded at 12.46 pounds, and the selling price at 12.53 pounds.
- Abu Dhabi Islamic Bank: The buying price was 12.51 pounds, and the selling price was 12.54 pounds.
These slight differences reflect the natural competition between banks to attract customers, and overall they indicate the stability of the exchange rate in official channels, which is a positive indicator of the success of recent monetary policies in restoring balance to the market.
