© Reuters.
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Investing.com – The pound fell against the dollar during trading Thursday to coincide with the release of the interest rate fix last Thursday. At a time when most of the world’s major currencies are suffering from the dollar’s growing strength due to the rise in US interest rates issued on Wednesday.
During these trading moments on Monday, the foreign exchange market witnessed a further devaluation of the Egyptian pound by two plates, pushing the pound to its lowest level ever, according to data from central Egypt.
Pound Wednesday
The pound exchange rate in the domestic banks, the National Bank of Egypt and the Banque Misr, rose twice during Monday’s mid-trading, reaching levels of £ 19.52 on sale and levels of £ 19.46. in purchase.
According to the National Bank of Egypt and Banque Misr screen last Wednesday, the dollar’s exchange rate increased against the Egyptian pound by 5 piastres, from £ 19.45 in sales and levels of £ 19.39 in buying. at levels of 19.5 pounds for sale and 19.44 pounds for purchase.
In private banks, Abu Dhabi Islamic Bank, Commercial International Bank, Egyptian Arab Land Bank, The United Bank, Alexandria Bank, HSBC and Arab African International Bank, the dollar’s selling price recorded levels of 19.54 pounds, while the purchase, the price recorded levels close to 19.51 pounds per dollar.
36 plates during the era of the new governor
Losses of the pound have increased against the dollar since Egypt’s new central bank governor, Hassan Abdullah, took over as president of the bank on August 18, 2022, succeeding the resigned governor, Tariq Amer, causing the pound to lose 36 plates in total.
Hassan Abdallah took over his duties at that time, when the pound was trading near levels of 19.1984 pounds per dollar, while today it is trading close to 19.5584 pounds per dollar.
As the pound fell since the decision to liberalize exchange rates, or as described by the former central governor at the time, the correction in exchange rates has increased by 3.5 pounds, or the equivalent of a 23% decline. .
December 20, 2016 The dollar exchange rate was 19.5605, the highest official ever.
On March 20, 2022, the dollar against the pound exchange rate registered levels of 15.7786 pounds per dollar.
On March 21, 2022, there was the liberalization of the exchange rate, which caused the pound to fall against the dollar to levels of 18.2884.
On August 18, 2022, the resignation of the former governor and the appointment of Hassan Abdullah, the dollar exchange rate registered levels of 19.1984.
central decision
On Thursday, the Monetary Policy Committee of the Central Bank decided to keep the interest rates on sight deposits and loans and the main operating rate of the central bank at the levels of 11.25%, 12.25% and 11.75, respectively. %, and the credit and discount rate were kept at the level of 11.75%.
The decision came against expectations and despite the US Federal Reserve’s decision on Wednesday evening to raise interest rates by 75 basis points, as the Egyptian Central Bank’s Monetary Policy Committee surprised the market with its third consecutive fix.
The first time the Central Bank of Egypt set interest rates for the first time was on June 23, when it was decided to set interest rates at 11.25 per cent for deposits and 12.25 per cent for deposits. one hundred for loans.
The second time, when he also decided on 18 August to set interest at 11.25 per cent for deposits and at 12.25 per cent for loans.
On March 21, the Central Bank of Egypt suddenly decided to raise interest rates by 1 percent to 9.25 percent for deposits and 10.25 percent for loans, so on May 19 it increased by 2 per cent to 11.25 per cent for deposits and 12.25 per cent for loans.
increase in another way
However, the Central Bank of Egypt has made a decision equivalent to increasing interest, according to experts, which is to increase the percentage of cash reserves that banks are obliged to keep at the Central Bank of Egypt at 18 percent instead of 14 percent, and this decision will help to tighten the monetary policy pursued by the Central Bank.
Experts said that despite rising monthly inflation, which reached nearly 15% last month, and all indicators tended to raise interest rates, the CBE preferred not to burden the state budget with new burdens. for debt service, because every 1% increase in interest is accompanied by an increase in debt service that exceeds 10% of billions of pounds more.
Market experts believe that the central bank has resorted to another restrictive monetary policy, namely to increase the required reserve that banks undertake to make available to the central bank without interest to cope with crises.
Therefore, it has reduced cash liquidity in banks and achieved the same goal of raising interest, which is to reduce lending and thereby reduce the rate of inflation, and this also achieves Egypt’s goals in providing Monetary Fund requirements. to obtain a new loan, the deal for which is nearing completion, according to a recent announcement by the Egyptian finance minister.
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