The US dollar exchange rate witnessed a notable increase against the Egyptian pound on Sunday at the close of trading in Egyptian banks, continuing the price fluctuations that began since the Central Bank of Egypt's decision to fully liberalize the exchange rate in March 2014. This rise comes in the context of local and global economic variables that directly affect the performance of the Egyptian currency.
Historical background: From fixing to full floating
For years, the Egyptian economy followed a managed exchange rate policy, with the central bank intervening to maintain the value of the pound against the dollar within a specific range. While this policy aimed to achieve stability, it eventually led to mounting pressure on foreign reserves and the emergence of a parallel market (black market) with a significant gap between the official and black market rates. To address these structural challenges, the monetary authorities made a historic decision on March 6, 2014, to unify the exchange rate and allow it to float freely according to supply and demand. This decision, accompanied by a substantial increase in interest rates, aimed to eliminate the parallel market, attract foreign direct and indirect investment, and secure a large-scale financing package from the International Monetary Fund.
The importance of the event and its expected impact
The liberalization of the exchange rate has profound and far-reaching effects on all sectors of the Egyptian economy. Domestically, the rise in the dollar's value increases the cost of imports, resulting in inflationary pressures that erode citizens' purchasing power, especially given Egypt's reliance on imports of essential commodities such as wheat, fuel, and production inputs. Conversely, other sectors benefit, such as exports, tourism, and remittances from Egyptians working abroad, as these become more competitive and their value increases in Egyptian pounds. Regionally and internationally, a flexible and transparent exchange rate enhances the confidence of investors and international institutions in the Egyptian economy and encourages the influx of foreign capital seeking a stable and transparent investment environment, which is a fundamental pillar for achieving sustainable long-term economic growth.
Latest dollar exchange rates in Egyptian banks today, Sunday
The following are details of the dollar exchange rates in a number of major banks operating in Egypt today, Sunday, which reflect market activity after the flotation decision:
- The dollar exchange rate at the Central Bank of Egypt is: 47.06 Egyptian pounds for buying and 47.20 Egyptian pounds for selling.
- The dollar price at the National Bank of Egypt is: 47.10 Egyptian pounds for buying, and 47.20 Egyptian pounds for selling.
- The dollar price at Banque Misr is: 47.10 Egyptian pounds for buying, and 47.20 Egyptian pounds for selling.
- The dollar price at Alexandria Bank is: 47.08 Egyptian pounds for buying, and 47.18 Egyptian pounds for selling.
- The dollar price at Suez Canal Bank is: 47.08 Egyptian pounds for buying, and 47.18 Egyptian pounds for selling.
- The dollar price at the Commercial International Bank (CIB): 47.09 Egyptian pounds for buying, and 47.19 Egyptian pounds for selling.
- The dollar price at Faisal Islamic Bank is: 47.10 Egyptian pounds for buying, and 47.20 Egyptian pounds for selling.
- The dollar price at Abu Dhabi Islamic Bank is: 47.18 Egyptian pounds for buying, and 47.28 Egyptian pounds for selling.
- The dollar price at the National Bank of Kuwait is: 47.12 Egyptian pounds for buying, and 47.22 Egyptian pounds for selling.
- The dollar price at Cairo Bank is: 47.13 Egyptian pounds for buying, and 47.23 Egyptian pounds for selling.
