Egyptian pound and dollar notes.
The source added that currency dealers in the parallel market start raising the USD/EGP rate beginning Sunday and lower it from Thursday through the weekend.
Egypt is currently suffering a harsh shortage of hard currency in the market, chiefly the US dollar, which caused a significant spike in US dollar rates in the parallel (black) market. The official USD/EGP exchange rate is around EGP 31, nearly EGP 18 lower (37.4 percent) than black market rates.
The source stressed that the market is in turmoil and that importers and vendors desperately need the dollar to continue their operations.
His comments brought to mind a recurrent pattern in the Egyptian gold market, where every week, prices, which are based on the parallel market rates, go down on Thursday through the weekend before rising at the beginning of the week.
Gold prices declined across different categories on Thursday in Egypt: 24-carat gold dropped by EGP 34 to EGP 3,177 per gram, 21-carat by EGP 50 to EGP 2,780 per gram, and 18-carat by EGP 43 to EGP 2,383 per gram. The gold pound also fell by EGP 240 to EGP 22,240 for purchase.
The CBE is already tasked with providing foreign currency to local banks as part of its role in regulating the money supply and exchange rates in the market, banking expert Hany Abou-El-Fotouh said in a phone call with Ahram Online.
However, the effect of such steps in the market is limited, and the central bank needs to increase its reserves to inject more hard currency into the market, Abou El-Fotouh added.
Furthermore, the banking expert noted that the remedy for the currency shortage is a set of long-term strategies, including boosting local industry, curbing imports, and attracting more foreign direct investments (FDI).
Earlier in November, the CBE revealed a slight uptick in international reserves.
Egypt is currently experiencing a severe US dollar liquidity crunch. Approximately $20 billion in hot money fled the local market as investors sought higher interest rates elsewhere.
The government, in turn, announced a plan to collect $191 billion through 2026 by gradually expanding its initial public offering (IPO) program and introducing additional incentives for foreign investors, such as tax exemptions and golden licences.
In addition, Egypt's commitments under a $3 billion loan program with the International Monetary Fund (IMF) involve implementing flexible regimes for both exchange and interest rates in alignment with private sector standards, enhancing the role of the private sector in the economy, and accelerating the pace of IPOs.