The Egyptian pound strengthened marginally against the US dollar on Sunday, with the Central Bank of Egypt (CBE) quoting the dollar at EGP 51.95 for buying and EGP 52.09 for selling. This represents a slight recovery from Thursday's rates of EGP 52.07 and EGP 52.21, respectively. However, the currency remains weaker than a week earlier, when the dollar traded at EGP 51.30 for buying and EGP 51.44 for selling.
According to CBE data, the dollar traded at various rates across 12 banks on Sunday, ranging from EGP 51.97 to EGP 52.20 for buying and EGP 52.07 to EGP 52.30 for selling. Abu Dhabi Islamic Bank quoted the highest rates, while Banque Misr and the National Bank of Egypt quoted the dollar at EGP 51.97 for buying and EGP 52.07 for selling. Other banks, such as Suez Canal Bank and Al Baraka Bank, recorded lower rates.
The Egyptian pound remains around EGP 0.65, or 1.3 percent, weaker than the previous Sunday. The currency has also depreciated by around EGP 4.1, or 8.5 percent, from its pre-conflict level of EGP 47.99 against the dollar. The ongoing regional tensions, including the conflict in Yemen and the situation in the Strait of Hormuz, have contributed to the currency's volatility.
The US Federal Reserve's recent decision to raise its benchmark interest rate by 25 basis points has also impacted the Egyptian pound. Higher US interest rates can support demand for the dollar, and the Fed's latest projections indicate the possibility of another increase before the end of the year. Markets are now awaiting the CBE's upcoming Monetary Policy Committee meeting on September 24 to review key interest rates.
Other currencies have also seen fluctuations against the Egyptian pound. The euro weakened slightly on Sunday, trading at EGP 59.65 for buying and EGP 59.82 for selling, down from EGP 59.76 and EGP 59.93 on Thursday. The British pound followed a similar pattern, trading at EGP 69.57 for buying and EGP 69.78 for selling. Gulf currencies, including the Kuwaiti dinar and the Bahraini dinar, also eased from Thursday's levels.
Gold prices have extended their gains in Egypt, with the gold sovereign rising by EGP 160 to EGP 51,080 on Sunday. The price of 24-karat gold increased by EGP 23 to EGP 7,297.25 per gram. These price hikes reflect the ongoing economic uncertainty and the impact of global events on local markets.
The Egyptian economy continues to face challenges, including high inflation and a large trade deficit. The government's efforts to attract foreign investment and implement economic reforms are crucial to stabilizing the currency and promoting economic growth. The upcoming Monetary Policy Committee meeting will be closely watched for any signs of policy changes that could impact the economy.
Key points
- The Egyptian pound has strengthened marginally against the US dollar but remains weaker than last week.
- The currency's volatility is attributed to ongoing regional tensions and the US Federal Reserve's interest rate hike.
- Gold prices have extended their gains in Egypt, reflecting the ongoing economic uncertainty.
