US dollar has recently appreciated about 10 piasters against the Egyptian pound. The average price of the American currency in banks operating in Egypt reached EGP 15.5965 for buying, and EGP 15.6956 for selling on Monday.
On 23 February, the US dollar price recorded EGP 15.4964 for buying and EGP 15.5964 for selling , the lowest level against the pound since the liberalisation of the exchange rate on 3 November 2016.
The official price of the dollar at the Central Bank of Egypt (CBE) on Monday reached EGP 15.5856 for buying, and EGP 15.7149 for selling, compared to EGP 15.4784 pounds for buying, and EGP 15.6071 for selling on 23 February.
Banking expert Mohamed Abdel-Aal said he expects the US dollar to continue to rise slightly on the short term due to the COVID-19 fears that would affect emerging markets. This will lead to the exit of some foreign investors from Egyptian government debt instruments, thus increasing the demand for the US dollar.
He suggested that the price of the dollar will fluctuate between EGP 15.5-16 in the next two weeks, depending on the evolvement of the situation.
Abdel-Aal said in the case of wide-scale outbreak, all markets and currencies will continue to be affected, as indirect investments will go to the US dollar, Japanese yen, and Swiss francs as safe haven.
The Coronavirus outbreak will also affect US dollar flow sources globally and consequently will leave a negative impact on Egypt. The decline in global trade traffic will reduce the passage of ships in the Suez Canal, leading to a decrease in its revenues and the country’s exports. Tourism revenues will also decline with the tendency of some countries to ban their nationals from travelling abroad.
Abdel-Aal believes that Egypt will not go through great pressures because of the Coronavirus, as banks operating in Egypt already have a large surplus of foreign exchange, with reserves exceeding $45.5bn, which covers 9-month imports.