The Central Bank of Egypt (CBE) stabilised the price of the Egyptian pound against the US dollar at EGP 8.78 in its weekly tender that was put forward on Tuesday. The market is waiting for signs to determine whether the CBE will cut the value of the pound again or not.
Banks are going to sell US dollars to their customers at a price of EGP 8.88.
The CBE sold roughly $118.6bn to the banks through its tender.
The CBE told the banks that acquired the dollars through the tender to direct them to customers who import pharmaceutical products, medicine manufacturing ingredients, vaccines, and chemicals related to medicines, in order to meet their needs, according to Tamer Youssef, head of the treasury at one of the foreign banks operating in the local market.
The market expected the CBE to devaluate the pound in the dollar tender on Tuesday after it was devaluated in March 2016 by almost 14%.
In terms of these expectations, the dollar price increased to between EGP 11.30 and EGP 11.50 in the informal markets for trading foreign currency.
The market’s expectations were based on the recent statements by Tarek Amer, governor of the CBE, in which he emphasised that the CBE is keen to follow a more flexible exchange rate policy.
The market is convinced that the CBE will cut the value of the pound against the dollar again, but the timing of this step will be specified by the CBE.