The US dollar price jumped against the Egyptian pound to register its highest level ever at the Central Bank of Egypt (CBE) and banks operating in the domestic market on Wednesday.
The official price of the US dollar against the Egyptian pound, according to the CBE’s transactions on Wednesday, registered EGP 18.4507 for buying and EGP 18.8773 for selling; compared to EGP 18.1518 for buying and EGP 18.5416 for selling on Tuesday.
The US dollar registered its highest level in banks in the middle of Wednesday’s transactions at EGP 18.50 for buying and EGP 19 for sale at HSBC-Egypt.
A senior banker refused to link the dollar price increase against the pound to the recent terrorist events in Egypt—namely the attack on a Coptic church on Sunday.
The source explained that the price of the dollar after the exchange rate liberalisation is subjected to supply and demand mechanisms; thus, it is natural to increase when there is a high demand on it and to decrease as demand is lower.
He pointed out that it may be required for the dollar to stand at EGP 18 for a period, so as to maintain the foreign exchange flow to banks and cover the demand on the dollar.
Commercial sources told Daily News Egypt that the unofficial market is still operating, but not without a struggle. The unofficial market is currently selling dollars at by EGP 0.05 to 0.10 less than banks and taking advantage of the widening margin between buying and selling prices in Egypt.
The sources managed to buy a few thousand dollars to import over the past few days, saying that they acquired the majority of the greenback from official banks.
Since the flotation of the pound on 3 November, banks have set foreign exchange rates according to supply and demand.
Tarek Amer, governor of the Central Bank of Egypt (CBE), said on Thursday that the CBE would not intervene again in the foreign exchange market after the pound’s flotation, and is no longer targeting a specific exchange rate.
President Abdel Fattah Al-Sisi predicted on Thursday that the dollar exchange rate will decline in the coming period.
Al-Sisi said in a speech on the occasion of Prophet Muhammad’s birthday that the problem of the dollar exchange rate will not remain as it is because it is not a fair price. He added that balancing the dollar exchange rate will take only a few months.
He explained that it is not normal for Egypt’s economy to have these dollar prices, referring to the EGP 17 and EGP 18 rates.