The US dollar price varied at banks and the Central Bank of Egypt (CBE) on Tuesday, amid a continuing wave of selling by clients.
The average price of the greenback at the CBE rose slightly on Tuesday, registering EGP 15.1595 for buying, up from EGP 15.1514 per $1 on Monday. Meanwhile, the selling price fell to EGP 15.8754 from EGP 15.9403 on Monday.
In banks, US dollars were changing hands on Tuesday at rates ranging between EGP 14.90 and EGP 15.25 for buying and EGP 15.75 and 16.35 for selling.
Tamer Youssef, head of treasury at a foreign bank operating in the Egyptian market, said that the US dollar price is expected to remain between EGP 15-16 for the coming three months, unless news—good or bad—leads its price up or down unexpectedly.
He pointed out that the current price was impacted by the positive news regarding the approval of the International Monetary Fund of lending Egypt $12bn and the arrival of the first tranche of that loan, along with reaching financing deals with a number of banks and international financial institutions. Collectively, this news pushed the price of the US dollar down against the Egyptian pound from EGP 18—on the first days of the flotation—to EGP 15-16.
The state targets to attract foreign investment to governmental debt instruments and the stock exchange. This will not happen unless the dollar price becomes attractive and the interest rate on Egyptian pound investments increases. Thus, the dollar price is expected to remain as is for three months, and the interest rates will probably remain the same for the next six months, in order to attract those investments, according to Youssef.
He said that we can expect direct foreign investment to enter Egypt, and the country’s credit rating and reserves to increase—which will push down the US dollar price to register EGP 14, if those steps are followed.