US dollar rate drops in major banks by 1.5% on Tuesday to EGP 48.8/1 USD

Doaa A.Moneim , Tuesday 12 Mar 2024

The US dollar rate against the Egyptian pound declined on Tuesday by approximately 1.5 percent to EGP 48.8/1 USD for selling, compared to EGP 49.5/1 USD recorded a week ago and EGP 49/1 USD seen on Monday, according to the rates on the Central Bank of Egypt (CBE)’s website.

currency exchange
Tourists walk past a currency exchange shop near the Ben Ezra synagogue in Coptic Cairo on March 8, 2024. AFP

 

The buying rate also decreased by the same average to reach EGP 48.7/1 USD, down from EGP 48.9/1 USD recorded on Monday and EGP 49.4/1 USD posted on 6 March.

The US dollar rate also saw a reduction in most banks to EGP 48.7/1 USD, including HSBC, Credit Agricole, the National Bank of Egypt, and Banque Misr.

On the other hand, Monday’s level of EGP 49/1 USD was maintained at a group of banks including the Housing and Development Bank, Alex Bank, and Abu Dhabi Islamic Bank.

In an unscheduled meeting, the CBE hiked last week the key interest rates by an unprecedented six percent (600 bps) and floated the local currency, allowing it to be determined by market forces.

As a result, the US dollar rate significantly jumped on 6 March by over 60 percent to EGP 49.5/1 USD, according to the CBE announced rates.

Last week, the IMF announced an expansion for the ongoing Extended Fund Facility (EFF) arrangement for Egypt from $3 billion to $8 billion in response to the global and regional escalations that have harshly affected the Egyptian economy.

The loan programme centers on four cornerstones as follows:
    • A shift to a flexible exchange rate system will help Egypt’s domestic economy adjust more smoothly to external shocks, support the ability of Egyptian businesses to sell their goods and services abroad and encourage greater investment.

    • Monetary and fiscal policy tightening, including through containing off-budget capital expenditure, are needed to reduce inflation and maintain debt sustainability.

    • In recognition of the significant adverse impact high inflation has on purchasing power, targeted budget support to vulnerable households is warranted and budget space for such support needs to be protected.

    • Better balancing the roles of the public and private sectors, with a focus on enhancing competition and allowing a greater role for the private sector in driving growth.

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