Arab Press

بالشعب و للشعب
Wednesday, Jul 24, 2024

Egypt's pound sinks further against dollar after flexibility pledge

Egypt's pound sinks further against dollar after flexibility pledge

Egypt's pound fell about 3% to 23.8 against the dollar as trading resumed on Sunday, Refinitiv data showed, after authorities committed to a flexible exchange rate under an International Monetary Fund support deal.
The pound slid about 14.5% to 23.1 against the dollar on Thursday after they pledged a "durably flexible" exchange rate in conjunction with a staff-level agreement for a $3 billion IMF extended fund facility.

Egypt's currency has been held steady or allowed to depreciate only gradually following previous sharp devaluations in 2016 and this March. It has weakened about 34% against the dollar so far this year.

In a note on Thursday, JP Morgan said it considered the pound to be fairly priced, and that it expected a gradual adjustment to 23.5 to the dollar by the end of the year.

"We expect USD/EGP to remain under pressure in the coming days as it finds a clearing level, but we view (Thursday's) adjustment as sufficient to close most of the external imbalances," the note said.

Egypt has been struggling to cope with the impact of the war in Ukraine, which led to rapid outflows of portfolio investments, a hike in the commodity import bill and a drop in tourism revenues.

It introduced a mandatory requirement for importers to use letters of credit, leading to a sharp slowdown in imports and bottlenecks at ports.

The central bank has said that requirement will be gradually phased out by December.

"Moving forward, it is essential that Egypt follows through on its promise for currency flexibility rather than managing future deprecation and allowing imbalances to build back up," said Patrick Curran, a senior economist at Tellimer.

The IMF programme could catalyze enough funds to meet external funding needs estimated at $40 billion over the coming year, with devaluation and an out-of-cycle 200 basis point interest rate hike on Thursday helping to contain financing needs by dampening import demands, Curran said.
Newsletter

Related Articles

Arab Press
0:00
0:00
Close
World's Hottest Day Recorded on July 21
Sri Lanka Apologizes for Forced Cremation of Muslim Covid Victims
Hacking Vulnerabilities: Androids vs. iPhones
Israel Conducts First Direct Air Raid on Yemen's Hodeidah Port
Joe Biden Withdraws from 2024 US Presidential Race
A Week of Turmoil: Key Moments in US Politics
US Criticizes International Court's Opinion on Israeli Occupation
Netanyahu Denounces World Court Ruling on Israeli Occupation
Adidas Drops Bella Hadid Over Controversy
UAE Court Sentences 43 to Life Imprisonment Over Terrorist Links
Spain PM Pedro Sanchez Denounces Double Standards on Gaza at NATO Summit
Biden Affirms Commitment To Presidential Race
2024 Predicted to Be World's Hottest Year
Iran's President-Elect Masoud Pezeshkian Reiterates Support for Hezbollah
Biden Insists on Continuing Presidential Race Amid Criticism
US Officials Resign Over Biden's Gaza Policy
Campaigners Push for Emergency Uplift Visa for Palestinians Escaping Gaza Conflict
Netanyahu Criticizes Release of Gaza Hospital Head
UK Government and British Airways Sued Over 1990 Kuwait Hostage Incident
Afghan Women's Rights Declared Internal Issue by Taliban
UK Appeals to ICC May Delay Arrest Warrants for Israeli Leaders
Iran's Presidential Election: A Close Race
Iran Threatens Retaliation if Israel Attacks Lebanon
EU Enforces Sanctions on Hamas Financiers
UN Agency Sued by Israelis Over Alleged Aid to Hamas
United States Bans Kaspersky Antivirus
White House Cancels US-Israel Meeting Amid Netanyahu's Accusations
Muslim Community Leader Criticizes Nigel Farage for Undermining Muslims
Hezbollah Chief Threatens All of Israel Amidst Escalating Conflict
Canada Lists Iran's Revolutionary Guards as Terrorist Group
Iran Sentences Nobel Laureate Narges Mohammadi to 1-Year Prison Term for Propaganda
Japan Considers Sanctions on UAE-Based Entities for Aiding Russia
Israel Rescues Four Hostages from Gaza
Iran Approves Six Candidates for Presidential Election After Raisi's Death
Israeli Commander Resigns After Hamas' October 7 Attack
Israeli War Cabinet Minister Benny Gantz Resigns Over Gaza Strategy
UN to Add Israel to Human Rights Blacklist
Labour Party to Pledge Recognition of Palestinian State in Election Manifesto
Hamas Rejects Biden's Gaza Ceasefire Proposal as 'Just Words'
Hamas Has Not Responded To Latest Ceasefire Proposal: Qatar
State of Palestine Seeks to Join UN Court Case Accusing Israel of Genocide
Hezbollah Launches Drone Squadron Towards Israeli Military Targets
US-Built Pier in Gaza Faces Setbacks and Repairs
Norway, Ireland, and Spain Recognize Palestinian State
ICC Seeks Arrest Warrants for Israeli and Hamas Leaders
Death of Iran's President Raisi Stirs Succession Race for Supreme Leader
What Happens If an Iranian President Dies in Office?
Iranian President Ebrahim Raisi Reportedly Killed in Helicopter Crash
FedEx Airlines Boeing 767 cargo plane lands on nose at Istanbul Airport
Netanyahu's Firm Stance Amid Rafah Hostage Talks
×