(AFP photo)
The value of the US dollar rose against the Egyptian pound in the official market to register EGP 7.19, compared to the EGP 7.14 rate that lasted over the past six months.
In December, the Central Bank of Egypt raised the number of weekly bids for the dollar (known as the FX auction) from three to four tenders.
The CBE then stated that it will raise bids of $40m four times a week, to supply a total of $160m, instead of $120m.
After this announcement the value of the dollar versus the Egyptian pound ranged between EGP 7.70 to EGP 7.75 in the unofficial market, Pharos Holding indicated in an official statement.
“We expect the CBE to administer an orderly devaluation before March 2015,” Pharos Holding said Sunday.
A recent report issued by HSBC stated that further devaluation in the Egyptian pound is expected in 2015 and 2016. The bank highlighted that the dollar will reach EGP 7.50 in 2015, and rise to EGP 8 in 2016.
Managing director of Pharos Holding Hany Genena expected that the government will face pressure “to put an end to the parallel market [black market]” prior to the Economic Summit, which is expected to take place mid March.
Ending the black market will help Egypt avoid losing the investors’ interest, which could occur due to concerns over currency risks and policy effectiveness.
“Based on the above, we see a 5% devaluation versus the US dollar as imminent,” Genena said.
