The Saudi riyal saw a slight decline against the Egyptian pound at the close of trading on Tuesday in most Egyptian public and private banks. This change comes amidst the daily fluctuations the Egyptian pound has been experiencing since the Central Bank's decision to fully float the exchange rate, allowing its value to be determined by market supply and demand.
Saudi Riyal exchange rates in major Egyptian banks today
According to the latest updates from banks, the Saudi Riyal exchange rates are as follows:
- The Central Bank of Egypt: The buying price was recorded at 12.48 Egyptian pounds, and the selling price at 12.51 Egyptian pounds.
- National Bank of Egypt: The buying price was 12.44 Egyptian pounds, and the selling price was 12.52 Egyptian pounds.
- Bank of Egypt: The buying price remained stable at 12.45 Egyptian pounds, and the selling price at 12.52 Egyptian pounds.
- Bank of Alexandria: The buying price was recorded at 12.46 pounds, and the selling price at 12.51 pounds.
- Commercial International Bank (CIB): The buying price was 12.46 Egyptian pounds, and the selling price was 12.51 Egyptian pounds.
- Abu Dhabi Islamic Bank: Recorded the highest buying price at 12.50 pounds, and the selling price at 12.53 pounds.
The economic context of exchange rate movements
The fluctuation in the exchange rate of the Saudi riyal against the Egyptian pound primarily reflects the state of the Egyptian economy. While the Saudi riyal enjoys considerable stability due to its peg to the US dollar (at a fixed rate of 3.75 riyals to the dollar), the Egyptian pound is undergoing a period of revaluation after years of partial pegging. The decision to float the exchange rate in March 2014 was a pivotal step within a broader package of economic reforms aimed at attracting foreign investment, eliminating the parallel currency market, and meeting the requirements of international financial institutions such as the International Monetary Fund. This flexible monetary policy allows the pound to rise and fall in response to local and global economic indicators.
The importance of the riyal exchange rate for the Egyptian family
The Saudi riyal exchange rate holds particular significance in Egypt, extending beyond its role as a mere economic indicator. Saudi Arabia hosts the largest Egyptian expatriate community, numbering in the millions. Remittances from these workers constitute a major source of foreign currency for Egypt, as their families convert their riyal savings into Egyptian pounds to cover living expenses. Therefore, any fluctuation in the exchange rate, even a slight one, directly impacts the purchasing power of these families. A depreciation of the riyal means a lower amount of money can be transferred in Egyptian pounds, and vice versa.
Impact on other sectors
The impact of the riyal's exchange rate extends beyond remittances to other vital sectors. The Hajj and Umrah pilgrimages are among the most important religious occasions for Egyptians, and travel and accommodation costs in Saudi Arabia are paid in Saudi riyals. Therefore, a decline in the riyal's value against the Egyptian pound makes performing these rituals more affordable for Egyptian citizens. On the trade front, Egypt and Saudi Arabia enjoy strong commercial ties, with Egypt importing Saudi products and exporting others to the Kingdom. The exchange rate affects the cost of imports and exports, which in turn impacts the prices of final goods for consumers and the competitiveness of Egyptian products in the Saudi market.
