We publish the latest update of the dollar price today, Wednesday, March 6, 2024, at the Central Bank of Egypt, according to the latest developments in the exchange rate of the Egyptian pound against a basket of foreign currencies, most notably the dollar.
The price of the dollar in the Central Bank of Egypt at the end of today’s trading was as follows:
Buy: 49.47 pounds
Sale: 49.57 pounds
It is worth noting that the three largest banks in Egypt ended their transactions today, as the price of the dollar stabilized above the price of 50 pounds, after the Central Bank of Egypt’s decision today to raise interest by 6%, allowing the exchange rate of the pound to be determined according to market mechanisms.
The price of the dollar in the 3 largest banks in Egypt was as follows:
National Bank of Egypt
Buy: 50.50 pounds
Sale: 50.60 pounds
Commercial International Bank CIB
Purchase: 50 pounds
Sale: 50.10 pounds
Egypt Bank:
Buy: 50.50 pounds
Sale: 50.60 pounds
The Central Bank of Egypt announced on Wednesday that it would raise interest rates by 600 basis points, in addition to allowing the pound to trade freely. This decision aims to restore economic stability and attract investments from the Gulf countries.
The central bank raised the key interest rate by 600 basis points to 27.75%. The bank said in a statement that the overnight deposit and lending rates were raised by 600 basis points to 27.25% and 28.25%, respectively.
The measures taken by the Central Bank of Egypt aim to combat inflationary waves and attract foreign investment, as the country suffers from a shortage of foreign currencies.
The Egyptian pound witnessed a decline against the US dollar at the end of today’s trading, and the exchange rate fell from about 30.85 pounds to the dollar to more than 50 pounds to the dollar.
The central bank said its measures would help end the black market for currencies and slow inflation, which has reached unprecedented levels in recent months.
According to official figures, the annual inflation rate exceeded 31% in January.
After the Central Bank’s announcement, Egyptian international bonds witnessed significant gains, as longer-term bonds witnessed the largest increase. According to Tradeweb data, 2047 bonds recorded the highest gains of 3.5 cents, reaching 83.2 cents. The premium demanded by investors to hold Egypt’s international bonds compared to US Treasury bonds also decreased. Which is considered a safe haven, to 529 basis points, the lowest level since June 2021, according to JPMorgan data.
The Central Bank of Egypt stated that it raised the overnight lending rate to 28.25 percent and the overnight deposit rate to 27.25 percent as part of its decision to implement a more aggressive monetary tightening strategy and ensure low core inflation. In its statement, the central bank stressed that it will continue to target inflation as its primary focus while allowing the exchange rate to be determined by market forces, facilitating a smooth transition.
Egypt’s financial landscape is witnessing a major transformation, as the Central Bank’s raising of interest rates has led to a rise in the value of bonds, representing a strategic economic maneuver.
In an important step, Egypt’s international bonds witnessed a noticeable rise after the Central Bank’s decision to increase interest rates by 600 basis points, coinciding with the Egyptian pound reaching new low levels. This development represents a pivotal moment for the country’s economy, indicating a strategy to confront inflation and achieve stability in the financial market. .
2047 bonds, in particular, saw big gains, rising 2.6 cents to 82.3 cents, according to TradeWeb data.
The decision to raise interest rates was part of a broader strategy by the Central Bank of Egypt to address growing inflationary pressures and provide a semblance of stability to the pound. The measure, which is seen as a step towards a long-awaited devaluation of the currency, aims to make Egyptian debt more attractive to international investors by offering… Higher returns.
The immediate response from the bond market underscored the global investor community’s renewed interest in Egypt’s economic prospects and longer-term bonds, especially those maturing in 2047, achieved the most significant gains, highlighting enhanced confidence among investors regarding Egypt’s long-term economic stability.
The announced monetary policy decisions come within the framework of a comprehensive economic reform package in coordination with the Egyptian government and with the support of bilateral and multilateral partners. In preparation for implementing the reform program measures, the necessary financing was provided to support foreign exchange liquidity. The Central Bank also emphasizes the importance of coordination between financial and monetary policies to limit the impact of external repercussions on the local economy, which puts the Egyptian economy on a sustainable path to maintain macroeconomic stability, ensure debt sustainability, and work to build international reserves.
It is expected that the elimination of the parallel market for foreign exchange will reduce inflationary expectations and curb inflation. Consequently, general inflation is expected to follow a downward path in the medium term, after the gradual decline of inflationary pressures associated with exchange rate unification. On the other hand, risks surrounding inflation expectations include regional geopolitical tensions, fluctuations in global commodity markets and global financial conditions. In light of those aforementioned risks and changes, a re-evaluation of the target inflation rates set by the Central Bank of Egypt will be clearly announced.
Recognizing that the Monetary Policy Committee’s decisions need time for their impact to be transmitted to the economy, the Committee will continue to evaluate the balance of risks surrounding inflation with the aim of controlling inflationary expectations. The Committee believes that the decision to raise key interest rates by 600 basis points will help tighten monetary conditions in a manner consistent with the targeted path of reducing inflation rates. These levels will be maintained until inflation converges to its desired path.
The Committee stresses the importance of maintaining the path of interest rates that limits the deviation of expected inflation from its target rate, as well as the deviation of economic activity from its maximum production capacity. The Committee will also continue to follow all economic developments according to the data received, and will not hesitate to use its available tools to maintain price stability in the medium term. The Committee reiterates that the path of core interest rates depends on expected inflation rates.
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