Dollar Price Falls against Backdrop of "Khleha Tsady"

By: Menna Seliem

CAIRO, Jan. 28 (SEE)- The fall of dollar price in Egyptian banks for the last few hours is regarded the highest reduction since two years ago.

The average price of dollar decreased in value 22 piasters against the Egyptian pound. It was purchased at 17.63 L.E and the selling price is 17.75 L.E in the most Egyptian banks. They include El- Ahly Bank, Misr Bank, the Commercial International Bank, Arabic African Bank, Emirates National Bank, and Credit Agricole Bank, amid great abundance in supply of the green currency.

This surprising reduction of dollar couldn't be identified as one reason from the monetary policy officials in Egypt, since there has been positive news on cash flow in foreign currencies to the Egyptian markets through international investment fund.

The reduction was recorded this January is regarded the largest positive net since the last May. It was supported by the Egyptian central bank which canceled foreign exchange fund, and allowed the cash flows to enter and exit freely through banks.

The expert of financial markets Samir Raouf thinks the decline in the dollar exchange rate came after the availability of money supply from foreign currency with the banking system. He attributed it to the high remittances of Egyptians working abroad, and the tourism sector that recorded recovery in the last period.

Raouf said, referring to the governor of the Central Bank Tarek Ammer statements about the price of the pound, the green buck will witness a potential movements, after the Egyptian Central Bank finished the mechanism of returning foreign investors' money back home.

He explained that the cancellation of this mechanism will enhance cash activity movements from and to banks, and therefore the price will increase according to supply and demand mechanism in market.

On the other hand, the vice president of the central bank Yehia Abo El-Fotoh considered the reduction of dollar as normal, since the drop and rise up of the foreign currency is not worrisome.

El-Fotoh explained the withdrawal of the investments from emerging financial markets in Turkey and Argentina in the second half of the last year was to increase profits or to reduce the loss rates, as with the start of the New Year the investors searched for stabled markets. These indicators applied on the Egyptian markets as it attracted about one billion dollars in the form of deposits and investments.

On his side, the deputy of the parliament's plan and budget committee Yasser Omar said the reason for this reduction against the Egyptian pound was the result of the injection of dollar financial resources to Egypt and the existence of significant financial flow. "This include the imminent to receipt the fifth installment of the IMF loan by Egypt worth 2 billion dollars," he added.

The weirdest opinion when the member of the Economic Affairs committee of the parliament Atef Makhalif said the main reason of the reduction was the campaign that the citizens carried out against cars and the foreign products "Khleha Tsady", and considered that this step reduced pressure by the hard currency.