The depreciation of the Egyptian pound against the US dollar picked up speed on Tuesday, recording EGP 18.10 at some banks, amid increased demand on the greenback and clients withdrawing dollars from banks to convert them on the black market.
On Tuesday, the price at HSBC registered EGP 18.30 to sell and EGP 18.10 to buy, up from EGP 15.70 on average in February.
At the Central Bank of Egypt (CBE), the price reached EGP 17.92 to buy and EGP 18.05 to sell.
Following the flotation of the pound on 3 November 2016, the exchange rate depreciated to reach EGP 20 to the dollar in mid-December, before recovering gradually to record EGP 15.73 to the dollar at some banks last week.
Yet, the demand increased on foreign currencies to cover importations for Ramadan, along with expectations of hiking the interest rate on the USD, which is likely to boost the value of the dollar against all currencies.
Ramadan will begin at the end of May this year. Egyptians usually buy bigger quantities of food and other commodities during the holy month.
A black market trader told Daily News Egypt that the price of the USD was at EGP 18.15 to buy and EGP 18.30 to sell, with big demand from importers.
The black market had earlier dropped most of its activity following the flotation as banks were capable of securing dollars for importers.
The depreciation of the pound against the USD will most likely attract investors to the Egyptian Exchange (EGX) and treasury bills due to their low price and high yield from government debt instruments.
