Dollar To be Traded at 15 Egyptian Pounds in H1 2020- Bankers

Bankers expected that the Egyptian pound will witness a noticeable increase against the US dollar during the first half of this year by about 75 piastres.

According to the data of the Central Bank of Egypt (CBE), the Egyptian pound rose against the US currency since the beginning of 2019 until by about EGP 2.01.

The average exchange rate of the Egyptian pound against the US dollar on Sunday amounted to EGP 15.77 for purchase, and EGP 15.87 to sell.

Experts emphasized that the rise of the Egyptian pound is due to several reasons represented in the increase in exports, tourists arrivals, and the rise of foreign investments in debt instruments.

The former vice president of Banque Misr Sahar Al-Damati expected that the pound will continue to rise during the coming period to record EGP 15  during the first half of this year.

Al-Damati pointed out that the rise of the Egyptian pound against the dollar is due to the improvement of economic indicators during the current period, which was received with the praise of all international institutions and credit rating agencies.

She added, that the availability of foreign currency in Egyptian banks continuously and permanently contributes to a significant increase in the pound, and that the high return on debt instruments such as bonds plays a significant role in attracting foreign investments to the country.

The former vice president pointed to the contribution of the tourism sector during the past period to the appreciation of the pound, especially with the sector's revenues posting a record level during the fiscal year 2018-19 to reach $12.6 billion for the first time, amid expectations that the sector's revenues will exceed $15 billion during the FY 2020-21.

Financial group Hermes expected that the Egyptian tourism revenues will exceed the barrier of $20 billion annually, during the next five years.

Hermes emphasized that the government has worked to improve the trade balance during the last period by increasing exports, and avoiding the increase in imports of recreational goods, explaining that the BOT is the backbone of the economy today and will significantly affect the stability or rise of the pound during the coming period.

Also, the increase in Egyptians' remittances during the current period contributed to the rise of the Egyptian currency.

The Central Bank of Egypt data showed that the transfers of Egyptians working abroad during the first quarter of the FY 2019-20 increased by 13.6%, equivalent to $ 803.6 million, to reach by the end of September about $ 6.7 billion, compared to $ 5.9 billion during the same period of the previous fiscal year.

For his part, the former adviser at the International Monetary Fund (IMF) Fakhry Al-Fiqi expected that the exchange rate of the Egyptian pound against the dollar will rise by about 50 piastres during H1 2020.

Al-Fiqi pointed to the multiplicity of the reasons for the appreciation of the pound to include the existence of one exchange rate and the elimination of the parallel market, along with tourism and gas revenues, as well as Egyptians' remittances and foreign investments in governmental debt.

He asserted that spending on infrastructure from new cities and new road networks will stimulate investment development, in addition to proceeding with the implementation of the economic reform program.

In a related context, Al-Shafei pointed out that a large part of the demand for the dollar during the past period was a matter of speculation, which is expected to decline during H1 2020, as well as the marginal stagnation in the import of goods, especially luxuries ones, which lead to decrease in dollar's demand.

He added that the high traffic in the Suez Canal also had an impact on the increase in the foreign exchange supply, which in turn is reflected in the price of the pound against the dollar.

The Suez Canal Authority announced that the canal’s revenues increased by 1.3% to record $ 5.8 billion in 2019.

The Central Bank announced that the net international reserves of Egypt increased by the end of December 2019 marginally by 0.14% at a value of $ 65 million, to reach $ 45.419 billion, compared to $ 45.354 billion at the end of November 2019.