The US dollar has lost over EGP 1 of its value since the start of the year, including about 29 piasters over the past three weeks alone.
The average price of the dollar declined in the local market at banks last Thursday to EGP 16.83 for buying and EPG 16.93 for selling, compared to EGP 17.87 for buying and EGP 17.95 for selling on 2 January, with nearly a decline of EGP 1.03.
The average official dollar price at the Central Bank of Egypt (CBE) reached EGP 6.81 for purchasing and EGP 16.93 for selling last Thursday, compared to EGP 17.85 for buying and EGP 17.97 for selling on 2 January 2019, a decrease of EGP 1.04.
The Egyptian market has received strong foreign exchange inflows during the recent period. The volume of these inflows reached about $29bn since the beginning of this year until the end of last week, of which $4.5bn were added since the beginning of May only.
According to Mohamed Abdel-Al, a banking expert and board member of the Suez Canal Bank, the decision to fix the pound interest rate by the CBE on Thursday will give a new push to the pound against the dollar, which will stimulate indirect investment in Egyptian debt instruments. It will encourage workers abroad to waiver foreign exchange and go to the pound to take advantage of the interest rate difference.
He stressed that the improvement of most economic indicators and vital foreign exchange sources, with the political stability, after the approval of the constitutional amendments, gave momentum and attraction of the pound at the expense of the dollar.
Abdel-Al expects the dollar to fall to a new level of EGP 16.5 during the coming period, with the increase of dollar waivers, as the dollar is expected to stabilise at this level until the end of the year.
He also expects a drop in the price of the custom dollar to EGP 15 soon.
This comes at a time when the Bloomberg agency confirmed that the Egyptian pound became one of the best performing currencies in 2019.
Bloomberg pointed out in a report that currently the pound is being traded at its strongest level for over two years after an increase of over 6% against the US dollar in 2019.