The US dollar price at the Central Bank of Egypt (CBE) and banks operating in Egypt surpassed EGP 19, registering its highest level since the flotation of the Egyptian pound on 3 November.
The price at the CBE on Monday recorded EGP 18.8088 for buying and EGP 19.1157 for selling, up from EGP 18.3246 and EGP 18.72 on Sunday—an increase of EGP 0.4842 for buying and EGP 0.3957 for selling.
Banks on Monday were offering higher prices of up to EGP 19 for buying and EGP 19.35 for selling.
The exchange rate of the pound against the US dollar since the flotation has been seeing volatility, raising questions regarding the value of the national currency and the circumstances of its fluctuation.
Mohamed Abdel Aal, a board member of both the Suez Canal Bank and the Arab Sudanese Bank, said that the volatility of the exchange rate is normal after the flotation.
There are six important factors currently controlling the exchange rate in Egypt, said Abdel Aal, led by the demand on the greenback and the supply that banks could secure.
According to Tamer Yousef, head of the treasury department at a foreign bank operating in the Egyptian market, the current demand for dollars can be seasonal, which includes the period for finalising budgets and transferring profits belonging to foreign companies.
Yousef considered it unlikely that the reason behind the recent increase in the dollar’s price against the pound is for covering import operations, because the current price of the dollar does not encourage imports.
He expected the supply of dollars to increase in January due to the increase in foreign investment that will focus on investing in government debt instruments and issuing international bonds.