The Egyptian pound remained stable against the dollar on Monday, even after the bombings of the two churches in Alexandria and Tanta and the three-month state of emergency declared by the president.
The average exchange rate at the Central Bank of Egypt (CBE) reached EGP 17.9789 for purchase and EGP 18.1065 for sale on Monday. The dollar price at banks ranged between EGP 17.95 and EGP 18.05 for buying, and between EGP 18.05 and EGP 18.2 for selling, only a slight change compared to Sunday.
Daily News Egypt asked a number of banking experts about this issue. They asserted that the spread of terrorism in many countries and the declaration of a state of emergency by major countries, such as France, have reduced the impact of recent terrorist attacks on the Egyptian exchange market.
A board member of an Egyptian bank, who spoke on condition of anonymity, said the effect of the terrorist attacks on the Egyptian economy and the dollar exchange depends on the world’s assessment of the events and the state’s control over the current situation.
He added that terrorism has become a global phenomenon, and major countries tended to impose a state of emergency after they were hit by terrorist attacks. Therefore, the recent events became understandable to the world.
However, he said the foreign exchange resources may be affected temporarily, mainly tourism, which would increase the dollar exchange rate in the short term, but this effect will end shortly.
The CBE and banks operating in Egypt should reassure their customers by securing their demands of dollars to overcome the current situation, according to him.
Tamer Youssef, head of the treasury sector at a foreign bank in Egypt, said the exchange market is on alert for the repercussions of the recent terrorist attacks on the foreign exchange resources, such as tourism and foreigners’ investments in government debt instruments.
Youssef added that the pound’s exchange remained stable against the dollar on Sunday and Monday due to a temporary slow movement in the market, expecting that the current situation will last for several days, before the dollar will fall under the EGP 18 mark again.
Many countries have experienced similar terrorist attacks, so the recent church bombings will not affect the investment climate or tourist inflows to Egypt, especially as the explosions occurred in places away from tourist areas, according to Youssef.
He also ruled out any negative effect on the country’s credit rating, because credit institutions are more concerned of political fluctuations and their impact on the economy.
Youssef noted that after the flotation, the dollar price has become more sensitive for public events, whether positive or negative. However, the dollar exchange rate now depends on the cash flows to Egypt following the recent attacks.