The Central Bank of Egypt (CBE) ignored market expectations once again and decided to stabilise the US dollar’s price in its weekly auction offered on Tuesday for selling the dollar to banks.
The dollar exchange rate price is EGP 8.78, which is the price fixed by the CBE since March. Banks sell the US dollar to customers at a price of EGP 8.88.
Expectations increased significantly in the market on Tuesday morning that the CBE will float the pound completely or significantly devalue it against the US dollar—through an exceptional auction offered to cover banks’ customer’s needs.
According to Osama El-Menilawy, the assistant general manager of the financial sector at a private bank operating in Egypt, said that he expected the CBE to offer a regular weekly auction and fix the US dollar price again, which contradicts with the market’s expectations.
El-Menilawy expects the CBE to stabilise the price of the Egyptian pound against the US dollar before 11 November—which is expected to witness street demonstrations protesting against recent price hikes.
“The pound’s devaluation before 11 November will be illogical, because it will significantly increase the prices and create a state of public anger,” El-Menilawy said.