The Information and Decision Support Center (IDSC) in the Egyptian cabinet said Wednesday that the banks operating in Egypt provided $2.2bn to meet the needs of their customers and secure documentary credits as of Monday, since the liberalisation of the exchange rate of the Egyptian pound.
The Central Bank of Egypt (CBE) had liberated the Egyptian pound exchange rate early November, scoring EGP 13 against the US dollar during the first day of liberation instead of EGP 8.88, and increased the interest rates by 3% to adjust to the foreign exchange market.
In response to rumours that some banks refused to sell foreign exchange to their customers due to its scarcity, the CBE said in a press statement that the banks are working to secure all the foreign exchange needs of customers.
The banking sector injected more than $2.2bn to cover customers’ needs and provided documentary credits to foreign trade transactions, starting from the Egyptian pound’s flotation until 14 November.
Tarek Amer, governor of the CBE, said in a press statement on Wednesday that the total proceeds of US dollars purchased by banks since the flotation as of Monday registered $2.6bn.
Economic experts believe that currency liberation will encourage foreign investments, increase exports, and enable companies to obtain dollars from banks at market prices— which will return them for full production again, after the production processes declined in the past period due to the shortage of foreign currency reserves.
The dollar price in banks jumped to EGP 18 in some banks after the flotation; however, it has now declined to EGP 16.
Egypt has received the first tranche from the International Monetary Fund’s (IMF) loan worth $2.75bn, which was approved on 11 November.