(AFP Photo)
The value of the Egyptian pound increased against the USD on 26 August and 27 August, following a low-turnout at political demonstrations on the preceding Friday.
According to currency exchange dealers, the dollar is officially bought for EGP 6.9868 and sold for 7.0168; in the black market, the value of the Egyptian pound against the US dollar rose, with the greenback dropping from EGP7.25 to EGP7.10.
“The low-turnout was a sign that the country is regaining stability, and this helped in strengthening the Egyptian pound,” said Gamal, the owner of an exchange retail shop.
An employee at Misr Exchange Office attributed the change to the depreciation of the US dollar and not the increase of the Egyptian pound. “Currently there is no liquidity in the local currency and the demand for the dollar is down. Meanwhile, the demand on the Egyptian pound is on the rise,” he said. “The value of the Egyptian pound compared to the dollar in the black market is extremely close to the official value at the Central Bank of Egypt,” the employee added.
On 26 August, the central bank reported that domestic liquidity rose to EGP 1.268tn at the end of May compared to EGP1.094tn at end of June last year, registering an increase of 15.9% during the 2012/2013 fiscal year.
Another dealer at Arab Exchange Group stated that aside from the liquidity problem, there are several factors that affect the EGP-US value adding that the value of the Egyptian pound was weakening prior to the 14 August violence.
On 14 August, sit-ins supporting ousted president Mohamed Morsi were violently dispersed and affected the value Egyptian pound against the US dollar on the black market. Gamal previously stated that the pound had witnessed a minimal recovery when its value recessed, increasing the price of the US dollar rise to EGP 7.20, compared to EGP 7.05 in July.
During the same period the US dollar per Egyptian pound ratio was said to have strengthened to EGP 6.98 at a central bank foreign currency auction on Thursday after a drop in value following Morsi’s overthrow on 3 July, according to Reuters.
The US dollar depreciated against the Egyptian pound to reach EGP 6.99 after reports of the $12bn pledged Gulf aid earlier in July.
