Banks operating in the local market and their various branches in the republic disposed of foreign currencies, mainly the US dollar, on Tuesday, after a significant decline in its price against the pound.
The dollar price continued to decline against the pound on Tuesday to reach the lowest level since 17 November 2016.
The official price for the dollar at the Central Bank of Egypt (CBE) on Tuesday registered at EGP 16.4986 for buying and EGP 16.6281 for selling, compared to EGP 17.2241 for buying and EGP 17.3519 for selling on Monday—a decline of 0.72 pounds.
The dollar price decreased during the middle of the bank’s transactions on Tuesday to a level of EGP 16.40 and EGP 16.58 for buying, and EGP 16.50 and EGP 16.70 for sale, in all operating banks in the domestic market—a decline of roughly EGP 1 on Monday.
Banque Misr has seen a great demand from citizens selling the dollar because of its continuing decline against the pound in the bank’s transactions over the last few days.
According to Tamer Youssef, head of the treasury sector in one of the foreign banks operating in Egypt, the branches of the bank in a number of provinces have witnessed a large turnout of citizens to get rid of various foreign currencies, not just the dollar.
He pointed out that the decline of the dollar price caused other Arab and foreign currencies traded in banks operating in Egypt to decline, since the dollar is one of the pricing factors of those currencies against the pound.
According to CBE, the euro lost about EGP 2.7 of its highest price after the flotation, as it registered at EGP 17.5331 for purchase and EGP 17.6724 for sale on Tuesday, compared to EGP 20.2521 for purchase and EGP 20.4203 for sale on 1 February.
The sterling pound also lost about EGP 3.1 from its highest price after the flotation, as it reached EGP 20.5623 for purchase and EGP 20.7303 for sale, compared to EGP 23.7215 for purchase and EGP 23.9198 for sale on 1 February.
The decline of the US dollar has also reflected on the Saudi riyal as it lost about EGP 0.7, registering on Tuesday at EGP 4.3989 for purchase and EGP 4.4337 for sale, compared to EGP 5.1061 for purchase and EGP 5.215 for sale on 20 December.
According to Youssef, the banks have seen a significant increase in the supply of foreign exchange as foreigners started to invest in government debt instruments and the Egyptian Exchange in local currency.
A source at CBE said in a statement on Monday that the banks received flows of foreign exchange amounting to $12.3bn since the flotation of the pound on 3 November 2016, pointing out that the banks once collected about $635m in one day.