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The exchange rate of the dollar has seen a gradual decline relative to the Egyptian "currency" of banks operating on the Egyptian foreign exchange market, with about 58 piastres since the beginning of the current year 2019, reaching its level the lower for more than two years.
Bankers have attributed the reasons that led to the decline in the dollar's exchange rate against the British pound in order to increase the flow of exchange to the Egyptian market and the Egyptian banking system since the beginning of the year. current year 2019 until now.
During the months of January and February, the Egyptian government witnessed a significant increase in the inflow of dollars into the banking system, after the entry of nearly $ 2 billion into the central bank, worth the fifth portion of the international loan granted by the International Monetary Fund. Billions of dollars in dollar bonds that the Egyptian Ministry of Finance has sold in international markets.
Currency inflows also included nearly $ 4 billion of global funds in the form of investments in securities, domestic debt instruments, and $ 4 billion in foreign exchange concessions in February 2019, The Bank Central Egypt, Monday.
The dollar has fallen against the pound during the day
The US dollar exchange rate has started to drop significantly against the Egyptian pound since the last week of January, after a period of stability that lasted for several months, before falling significantly during the trading session on Monday. the average exchange rate of the US dollar to 17.38 pounds On the purchase price 17.28 pounds, according to data released by the Central Bank of Egypt.
Misr Bank's chairman of the board, Mohamed Al-Etribi, said the decline in the US dollar's exchange rate against the Egyptian currency was due to the increase in exchange rate flows. his country and the increased confidence of international institutions in the success of Egypt's economic reform program.
He added that "the proceeds of Egyptian remittances working abroad and foreign currency customers' concessions to the Central Bank of Egypt have recorded a significant increase, exceeding 2.7 billion dollars from the bank for the months of January and February only ".
He pointed out that "in addition to the reasons for the return of global funds to buy the Egyptian pound in order to invest in Egypt's domestic debt instruments, the dollar exchange rate has resulted in a drop compared to the Egyptian pound.
Exchange rate at the National Bank of 3 billion dollars
Foreign currency inflows to the National Bank of Egypt have only exceeded 3 billion US dollars in the first two months of this year 2019, according to comments by Yahia Abul Fotouh, vice president of the National Bank of Egypt.
"The foreign exchange inflows to the National Bank of Egypt are split between Egyptian remittances abroad, concessions granted to customers, international investment fund investments in bonds, vouchers Treasury and export earnings, "he said.
Positive indicators contributed to the decline in the dollar's exchange rate against the pound sterling
"Many positive indicators have contributed to the dollar's decline against the pound sterling, including the renewed confidence of global institutions and funds in the strength of the Egyptian economy, as well as the praise of the Fund. monetary policy for the success of the Egyptian economic reform program. "
"Currency flows have improved significantly in the first three months of 2019, with growth in tourism flows and the return of foreigners to strong investments in domestic debt since the beginning of 2019. "
The value of foreign investment in bonds and treasury bills in the Egyptian market increased by about US $ 15.8 at the end of February 2019, according to Egyptian Finance Minister Mohammad Moait.
An official source at the Central Bank: the dollar's decline against the pound due to foreign currency flows to Egypt
An official source at the Central Bank of Egypt said that "the decline in the dollar's exchange rate against the pound is due to the increase in foreign exchange inflows, in addition to the currency and monetary reform program. preferred financial institution that Egypt has started to implement since November 2016 ".
"This must be seen in the Egyptian pound's recovery since early May 2018, but this recovery has been delayed by the emerging-market crisis that began with the major trade war and protective measures taken in the United States."
Emerging markets have been hit by a wave of outflows by foreign investors since the beginning of April, as the dollar strengthened and fears of their economies mounted, especially after the crises in Argentina and Turkey .
According to data released by the Egyptian Central Bank, Egypt lost about 10.8 billion USD of foreign investment in treasury bills during the last nine months of the previous year 2018, affected by the emerging markets crisis, but having recorded a large influx of foreign investment since the beginning of the year. 2019.
"With the easing of the US Federal Reserve, the pace of rate hikes, associated with the easing of the emerging markets crisis with the start of results reflected in the Egyptian money market, we have seen a steady improvement in rates foreign exchange, "said the source.
Economist: Most indicators of the Egyptian economy are improving
"You can see that most of the indicators are improving, tourism and exports, replacing local natural gas production, imports and transfers already achieved," said Hani Farahat, an economist at CI Capital Investment Bank. At the advanced level, foreign direct investment slightly improves. "
"The increase in flows is largely due to the abandonment by the Egyptian state of the mechanism of transfer of funds from foreign investors, which would have guaranteed investors wishing to sell their holdings of securities of foreign investors. State to transfer their money abroad in dollars, "explained Hani Farahat.
On December 4, 2018, the Central Bank of Egypt (CBE) announced the cancellation of the guarantee mechanism for the transfer of funds of foreign investors, which transferred the flow of foreign investment in debt securities to banks, which resulted in increased liquidity in the interbank market, and reflected positively on exchange rates.
According to an official source at the Central Bank of Egypt, "current exchange rates reflect economic and financial performance, and now the price is flexible and years of speculation on the currency." He explained: "The Central Bank of Egypt is committed to holding the Egyptian pound in a better position than this one." Currency Exchange ".
Read more: The latest dollar prices currently in banks and the black market.
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