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US dollar hits its lowest in two years - Daily News Egypt

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US dollar hits its lowest in two years

US currency lost 8.11 piasters last week, losing 49 piasters since January 2019

The dollar lost 8.11 piasters in return of the pound last week, averaging EGP 17.3983 for buying and EGP 17.4983 for sale on Thursday, March 7, compared to EGP 17.4794 for buying and EGP 17.5794 for selling on Thursday, 28 February.

This is the lowest level the US dollar hit in nearly two years.

The highest level of the dollar in banks at the end of trading last Thursday reached EGP 17.5 for buying and EGP 17.55 for selling at Abu Dhabi Islamic Bank (ADIB), while it recorded the lowest level at the National Bank of Egypt (NBE), where it reached EGP 17.40 for buying and EGP 17.50 for selling.

The dollar declined against the pound in January 2019 to its lowest level since May 2018, losing more than 30 piasters, driven by the increase in foreign exchange offered in banks, upon the return of foreign investments in government debt instruments.

The total losses of the dollar hit 47 piasters since January.

The Central Bank of Egypt (CBE) has recently disclosed that foreign investments in Egyptian treasury bills (T-Bills) rose again in January 2019, after about nine months of decline.

According to the CBE, the volume of foreign investments in T-Bills in January 2019 jumped to about EGP 233.8bn ($13.205bn), compared to EGP 192.281bn ($10.708bn) by the end of December 2018, an increase of about EGP 41.519bn ($2.497bn).

The Minister of Finance, Mohamed Moeit, confirmed that the amount of foreign investments in T-Bills and bonds (T-Bonds) in the Egyptian market reached $15.8bn at the end of February 2019.

In its poll on dollar exchange conducted at Dubai’s investment conference last week, EFG-Hermes revealed that 42% of participants voted for the dollar to reach EGP 18 by the end of 2019, while 13% expected it to fall to EGP 16, and 7% expected the dollar to hit EGP 20.

In Daily News Egypt’s poll, analysts said that the US currency may settle at the same level of 2018, while other analysts said it will only move in very narrow terms, with some expectations to be traded at a level between EGP 17.25-19 until the end of 2019.

According to the CBE’s report, the dollar was ranging throughout 2018 between EGP 17.6584 and 17.8534 for buying, and EGP 17.7838 and 17.9738 for selling.

Mohamed Abdel Aal, a member of the board of directors of the Suez Canal Bank and the Arab Sudanese Bank, expected the exchange rate of the pound to stabilise between EGP 17.25 and 18.50 per US dollar in 2019.

According to Abdel A’al, the Egyptian pound is not expected to face pressures in 2019, due to the positive growth and improvement of the national economy; stability in growth rates of net foreign reserves; the low rates of imports; the successful policy of liberating the exchange rates that has been applied since November 2016, as well as the attractive interest rates on deposits in local currency, with expectations to continue to rise until the end of 2019.

Tarek Metwally, the former deputy managing director of BLOM Bank Egypt, expects that the dollar will move between EGP 17.5 to 19 in 2019.

While Zakaria Salah, the banking expert, expected the stability of the dollar against the pound in 2019 at the same levels it reached in 2018, as a result of import restriction and the increasing rates of exports, which will positively reflect on the balance of payments.

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