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Egyptian Pound Trades at its Highest in 3 Years

Egyptian Pound Trades at its Highest in 3 Years

Tuesday, 11 February, 2020 - 09:00
Stacks of money are pictured as an employee counts them at a bank in Cairo September 4, 2014. (Reuters)
Cairo - Asharq Al-Awsat

The Egyptian pound gained on Monday to its strongest against the dollar since the week after Egypt allowed the currency to weaken as part of an economic reform plan backed by the International Monetary Fund more than three years ago.

The pound traded as strong as 15.66 to the dollar on Monday compared with 15.69 on Sunday.

“It is mainly portfolio-flow-driven and mainly from GCC portfolios, mainly in large purchases of Egyptian pound treasury bills,” one Cairo-based banker, who asked not to be named, told Reuters.

“That is in addition, of course, to stable consistent remittances and tourism," he added.

The pound last traded as strong on Nov. 17, 2016, six days after it signed a USD12 billion, three-year loan agreement with the IMF.

Remittances from Egyptians working abroad rose to USD6.71 billion in the July-to-September quarter, the most recent for which figures are available, from USD5.91 billion a year earlier. Tourism receipts climbed to USD4.19 billion in the same quarter from USD3.93 billion a year before.

At the urban level, the annual inflation rate for January 2020 rose to 7.2 percent, up from 7.1 percent in December, the Central Agency for Public Mobilization and Statistics (CAPMAS) revealed.

Inflation remains within the Central Bank of Egypt’s (CBE) target range of 9 percent, plus or minus 3 percentage points.

The government raised prices of fuel several times, and the latest was in July within agreeing on the USD12 billion loan. This, in turn, led to food products’ prices rising, including vegetables and fruits.

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