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Cairo: The Egyptian pound is the second best currency in the world

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During 3 years .. Egyptian pound trip since the flotation

During 3 years .. Egyptian pound trip since the flotation
The pound against the dollar
 03 Nov 2019 03:38 PM

From: Hiba Kurdi

Cairo - Mubasher: Today marks the third anniversary of one of Egypt's most important economic decisions in its history of liberalizing the exchange rate.

On 3 November 2016, the Central Bank of Egypt decided to liberalize the exchange rate of the pound against foreign currencies, to be determined according to the mechanisms of supply and demand

Three years after the floating decision, Mubasher is monitoring the most significant stops the Egyptian pound has experienced during this period (from its peak of weakness at the end of 2016 to reaching historic levels in 2019 touching the 16-pound barrier).

After flotation

Following the decision to liberalize the exchange rate in November 2016, the Egyptian pound witnessed a successive decline, during which it fell from 14.65 pounds to levels above 19.5 pounds for sale (reaching its peak in December 2016).

Since the decision to liberalize the exchange rate, the pound has fallen by about 9.8 percent, from 14.63 pounds to buy, and 14.65 pounds on sale on November 3, 2016 until October 31, 2019.

Consistency in 2018

The exchange rate stabilized during 2018 between LE 17.6 (beginning of the year) and LE 17.97 (seen in April 2018 since the start of the emerging market crisis).

The Egyptian pound rose only 1 percent last year from 17.79 pounds to 17.97 pounds.

Historical levels in 2019

The Egyptian pound witnessed a surge against the dollar during the first ten months of 2019, making historical gains by supporting interest rate cuts and improving economic performance, reaching the highest level in 31 months.

A direct survey showed that the Egyptian pound rose to its highest level against the dollar since early March 2017 (about 31 months), according to data available from the Central Bank of Egypt until October 31.

The Egyptian pound has gained about 9.95 percent so far this year at EGP 16.07 for buying and EGP 16.2 for sale, according to data available from the central bank.

The rise in the value of the pound was the main pillar after the slowdown in inflation rates to cut the Egyptian central bank interest rates by about three times since the beginning of the year.

The Future of the Pound

After the historical levels achieved by the pound during the last period, analysts expect the pound to decline near the level of 16 pounds by the end of this year.

Radwa El Swaify, head of research at investment bank Pharos, predicted that the value of the pound against the dollar will continue to rise to 16 pounds by the end of 2019.

Beltone's macroeconomic analyst confirmed that the rate of 16 pounds per dollar is the highest level in this bullish trend.

Alia Mamdouh expected no pressure on the local currency, amid limited fluctuations in the range of 16-17 pounds against the dollar.

It is noteworthy that the Ministry of Finance set the exchange rate of the pound in the budget for the fiscal year 2019-2020 at 17.46 pounds.

Mona Bedair, a macroeconomic analyst at Prime Research, told Mubasher that the gains made by the Egyptian pound have reached their peak, especially as the mitigation cycle began unexpectedly.

In a recent revision last month, the IMF said the pound's exchange rate had risen 8 percent since the IMF finished its final review of its economic reform program in May.

This partly reflects the increase in investment portfolio flows through the interbank market due to the abolition of the mechanism of transferring funds of foreign investors late 2, the fund said.

Fitch Solutions, a subsidiary of Fitch Ratings, said it expects the Egyptian pound to maintain its slow progressive trend against the dollar in 2019 by supporting the attractiveness of interest rates.

She said that the Egyptian economy will continue to improve in 2019 and 2020, in conjunction with reaping the benefits of structural reforms achieved by the government and moving forward capital investment at a rapid pace.

On September 26, 2019 , the Central Bank of Egypt (CBE) decided to reduce the overnight deposit and lending rate and the CBO's main operation rate by 100 basis points to 13.25 percent, 14.25 percent and 13.75 percent, respectively, for the third time during the year. .

 Central bank data showed that  foreign exchange reserves rose to $ 45.117 billion at the end of September, up from $ 44.969 billion in August.

A Mubasher survey showed Egypt's domestic liquidity rose to its highest level ever in September 2019, according to data available at the Central Bank of Egypt.

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Cairo: The Egyptian pound is the second best currency in the world

Economy | 04:30 - 08/12/2019

 
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Baghdad - Mawazine News
, Egyptian Finance Minister Mohamed Moait confirmed on Sunday that the Egyptian pound is the second best currency in the world in terms of strength.
"Coordination between fiscal and monetary policy was one of the most important factors for the success of the Egyptian economic reform program," Moait said, in a speech during the annual Arab Banking Conference.
He added: "This was shown in achieving the second best primary surplus in the world and the second best performing currency in the world in 2019, which gives a strong indication of the success of the economic reform program."
Moait pointed out that economic stability cannot be achieved without achieving political stability, which greatly affects economic growth rates.
He added: "We aim to achieve a growth rate of 6% in the current year and reach 6.4% in the next fiscal year, and we target 7% by 2022, and the monetary reserve of foreign currencies has reached more than 45 billion dollars now."
And "Beltone Investment Bank" previously issued a report saying that it "does not expect the pound to face any pressure, and to continue in this manner during the year 2020, with a limited fluctuation in the range of 16 pounds against the dollar."
The report added: "Initiatives related to the industrial sector confirm our vision that all policies are directed to maintain the strength of the local currency without any kind of interference in the market, but through efforts to support the flow of revenues in dollars and limit the growth of the import bill while improving private sector investments while improving demand rates." Ended on 29 / h

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