The Egyptian pound recorded a rise of 30.8 piasters against the US dollar during 2020, despite the severe economic effects of the novel coronavirus (COVID-19) crisis.
The US dollar reached EGP 15.6842 to buy and EGP 15.7842 to sell at the last year end. This compared to the EGP 15.9931 to buy and EGP 16.0931 to sell recorded at the end of 2019.
January 2020 witnessed the US dollar’s largest decline against the Egyptian pound, recording EGP 15.7494 to buy and EGP 15.8494 to sell. The American currency witnessed its largest rise in the year when it moved from EGP 15.8383 to buy and EGP 15.9383 to sell at the end of May, to EGP 16.0869 to buy and EGP 16.1869 to sell at the end of June.
The Egyptian pound recorded the strongest performance against the US dollar among emerging market currencies during 2020. This came despite the challenges and difficulties the domestic economy faced throughout the year, due to the coronavirus and its severe impact on the state’s foreign exchange resources.
The country’s monetary policy file was well managed by those in charge of the Central Bank of Egypt (CBE). It took several measures to support the economy, and boost the confidence of international investors in the Egyptian currency.
Among the nine major emerging market currencies, the Egyptian pound was the only one that succeeded in defeating the dollar, with gains of more than 2% since the beginning of the year. Other emerging market currencies, on the other hand, suffered losses ranging between 2% and 30% against the US dollar.
Banking expert Mohamed Abdel Aal said that the distinction of the performance of the Egyptian pound against different currencies in emerging markets was not only the result of 2020, but it was the result of an effort that began at the end of 2016 since the liberalization of the exchange rate.
Abdel Aal stressed that had it not been for the emergence of the coronavirus pandemic, the Egyptian pound would have achieved strong gains during 2020. This would also have seen the dollar fall to levels near EGP 13, in expectation of the Egyptian pound’s continued strong performance at its current rates during 2021. This would have seen the movement in the narrowest limits between levels of EGP 15.50 and EGP 15.75.