The exchange price of the US dollar against the Egyptian pound jumped Wednesday by about 6.77% in banks operating locally, breaking the barrier of EGP 26 to record its highest level in the official market.
The official price of the dollar at the Central Bank of Egypt (CBE) rose to EGP 26.3633 for purchase and EGP 26.4853 for sale at the close of trading on Wednesday, compared to EGP 24.7279 for purchase and EGP 24.8056 for sale on Tuesday, up by about EGP 1.63 for buying and EGP 1.67 for selling.
The highest price of the US currency in banks reached EGP 26.51 for purchase at the Arab Investment Bank, while it recorded EGP 26.60 for selling at the Mashreq Bank.
The price of the dollar recorded EGP 26.25 for purchase and EGP 26.30 for sale in the National Bank of Egypt and Banque Misr, while it reached EGP 26.30 for purchase and EGP 26.40 for sale in the Commercial International Bank, and it circulated between EGP 26.10 and EGP 26.50 for purchase and EGP 26.20 to 26.55 for sale in a large number from banks.
The average price of the dollar in banks, according to Central Bank figures 26.3894 pounds to buy and 26.4778 Pounds for sale, at the end of Wednesday’s trading, compared to EGP 24.7083 for purchase and EGP 24.7850 for sale on Tuesday.
This is the third floating of the Egyptian pound against the dollar since 3 November 2016, and comes in implementation of the Central Bank of Egypt’s pledge to use the flexible exchange rate, as a prerequisite for Egypt’s obtaining the International Monetary Fund loan that was approved last December.
On 17 December, the International Monetary Fund approved a 46-month programme of cooperation with Egypt under the $3bn Extended Fund Facility.
The program includes a package of policies that Egypt must follow, most notably the permanent shift to a flexible exchange rate system to enhance resilience in the face of external shocks, rebuild external protective reserves, and implement a monetary policy aimed at gradually reducing inflation rates in line with the objectives of the Central Bank, in addition to strengthening the monetary mechanism. Transmission of monetary policy effects, including through the removal of support for lending programmes.
It is noteworthy that the movement of the US currency against the Egyptian pound had preceded today, the announcement of the National Bank of Egypt and Banque Misr, the two largest government banks, to issue a new one-year savings certificate with a return of up to 25% to be spent at the end of the certificate period, or with a return of 22.5% to be spent monthly.
The new savings certificate is issued in denominations of EGP 1,000 and its multiples, and is available to natural adults and minors, both Egyptians and foreigners.
The interest is calculated from the day following the purchase of the certificate directly, and it is possible to borrow against its guarantee, and it is not permissible to recover the value of the certificate before the lapse of 6 months starting from the working day following the day of purchase, and the certificate is also retrieved at the end of its period at its full nominal value, and it can be recovered before that date according to the established recovery values at the bank.
The certificates are available through all branches of the two banks, through the banking internet and the mobile banking application, as well as through the bank’s call centre.
Hani Hafez, a banking expert, said that the issuance of certificates by the National Bank of Egypt and Banque Misr with a return of 25% is one of the tools aimed at mitigating the current and potential risks as a result of the Russian-Ukrainian crisis.
He added that the Central Bank seeks, through monetary policy tools, to contain the effects of inflation and preserve the savings of the family sector in the banking sector, in addition to creating an incentive for Egyptians to invest in a safe savings vessel with a fixed return that does not involve risks of price changes and speculation, and thus eliminate what is called dollarization in the market, especially in light of the fluctuation in the price of foreign currencies against the Egyptian pound, which works to give customers a better investment away from risk.
He explained that the decision aims to enter new funds into the banking sector through new clients in addition to the existing clients of banks who target a safe investment, in addition to increasing the rates of financial inclusion and maintaining financial transactions.
