Some also linked the drop in the USD’s value to the Central Bank of Egypt’s recent decision to raise interest rates by 2%
As news of a potential foreign currency windfall spread across Egypt, the country’s black market has begun to scale back the growing gap between the official and unofficial exchange rate, with reports revealing that the EGP has made a comeback from a recent peak of EGP 72 against the USD to EGP 53-55.
Currently, the official rate of the US dollar is almost EGP 31.
Several media reports have highlighted rumors of an incoming influx of dollar liquidity into local banks as part of upcoming investment projects and multilateral partnerships, as well as the coming depreciation of the EGP.
The fall in the USD’s value can be attributed to a variety of factors, including anticipated inflows of foreign currency from the International Monetary Fund (IMF), the European Union, and rumored Arab and Gulf investments.
Some also linked the drop in the USD’s value to the Central Bank of Egypt’s recent decision to raise interest rates by 2%.
The IMF recently shared that the fund and Egypt are nearing a new financial support package, with reports expecting the current $3 billion loan to expand between $6-10 billion.
“We are in this very last stretch when we are working on the details of implementation… We are very close. So, we are not talking about a long-protracted period at all,” explained IMF Managing Director Kristalina Georgieva in a media roundtable on Friday.
European Commissioner for Neighborhood and Enlargement Oliver Varhelyi announced the approval of additional financial and economic assistance for Egypt over the weekend but did not disclose the amount.
Additionally, the government’s latest strategic document details an ambitious target of $100 billion in annual exports, as well as plans to bolster other sectors that attract large amounts of foreign currency, which could have increased confidence in the Egyptian pound.
