Dollar, Euro Surge against Egyptian Pound in Midweek Banking Trade
The U.S. dollar and the euro recorded significant gains against the Egyptian pound in late Wednesday trading across several local banks in Egypt.
The rise comes after a relatively stable start to the day, with the dollar in particular showing a sharp increase in both buying and selling rates.
In a clear sign of ongoing pressure on the local currency, the U.S. dollar rose by 15 piasters at Egypt's two largest state-owned banks, the National Bank of Egypt (NBE) and Banque Misr.
The Egyptian pound continued to lose ground against major currencies, as the U.S. dollar and euro posted significant gains in local banking markets. The dollar's appreciation coincides with rising global demand for the greenback, driven in part by anticipation surrounding upcoming remarks from Federal Reserve Chair Jerome Powell.
The U.S. dollar index climbed by 0.4% over the past two days, reaching 98.393, its highest level since August 12. This upward movement is largely attributed to investor caution ahead of Powell's speech at the Jackson Hole Economic Symposium later this week, a closely watched event that often signals shifts in U.S. monetary policy.
In Egypt, the dollar traded at EGP 48.55 for buying and EGP 48.65 for selling at both the National Bank of Egypt and Banque Misr by the close of Wednesday's session, a rise of 15 piasters compared to the start of the day.
Adding to the mounting economic pressure, Egypt's 5-year Credit Default Swaps (CDS), a measure of sovereign debt risk, have jumped to 449 basis points, retreating from a four-year low. This increase signals growing concern among investors about Egypt's fiscal position and external financing needs.
The surge comes at a time when Arab investors have begun reducing their exposure to local debt instruments. According to official data, Arab investors sold over EGP 6.2 billion in Egyptian Treasury bills on Tuesday alone, following net sales of EGP 5.8 billion last week. The sell-off could fuel increased demand for dollars in the banking system, potentially exacerbating currency pressures.
Compounding the issue is Egypt's recent decision to raise overseas credit card spending limits, now allowing up to $10,000 per transaction, an adjustment that could facilitate greater capital outflows at a time when foreign reserves remain under strain.
Meanwhile, discussions are reportedly underway between the Ministry of Finance and major oil companies regarding the structure of taxes on crude oil, signaling potential changes to Egypt's fiscal strategy as it seeks to bolster revenue amid external headwinds.
Dollar
At the close of trading, the exchange rates stood as follows:
National Bank of Egypt (NBE): To Buy: EGP 48.55 / To Sell: EGP 48.65
Banque Misr: To Buy: EGP 48.55 / To Sell: EGP 48.65
The sharp rise reflects broader trends in the foreign exchange market, with traders responding to both global currency shifts and local economic conditions.
Euro
The euro follows Suit with broad-based gains, and also appreciated significantly against the pound, mirroring the dollar's trajectory. Late-session data from several banks confirmed widespread increases in euro rates, marking a day of across-the-board foreign currency appreciation.
National Bank of Egypt (NBE): To Buy: EGP 56.43 / To Sell: EGP 56.77
Banque Misr: To Buy: EGP 56.43 / To Sell: EGP 56.79
Currency analysts suggest that today's movements may be driven by a combination of global economic factors, investor sentiment, and Egypt's ongoing fiscal and monetary policy adjustments. The Central Bank of Egypt has yet to release an official statement regarding the recent surge in foreign exchange rates.
With continued volatility expected, market participants will be closely monitoring any developments that could impact Egypt's foreign currency reserves, import activity, and inflation outlook.
Dollar Exchange Rate
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