Return to normal demand on US dollar in Egypt’s informal market

The informal currency trading market has experienced a noticeable state of calm with the return to normal demand on the US dollar on Tuesday after the impacts that tailed the shock of the foreign exchange reserves decline.

The parallel market witnessed increased demand for the US dollar since Sunday after the announcement that foreign exchange reserves had declined by $2bn as of the end of July. The dollar price increased in that market to a nearly EGP 12.5 average purchasing and selling price.

Peace returned to the market again after a report was issued by the Central Bank of Egypt (CBE) detailing the reasons for the reserves’ decline, following which the dollar price on the informal market dropped to EGP 12.30.

The CBE explained in the report that the decline of reserves is due to the state’s repayment of nearly $2.25bn in financial commitments.

In the same context, the CBE fixed the Egyptian pound exchange rate against the US dollar in its tender on Tuesday at EGP 8.78, which is the same level of the dollar price at the CBE in March.

The CBE sold about $117.9m to banks during the tender. Banks sell the dollar to their clients at EGP 8.88.

The CBE demanded that banks obtaining dollars from the tender allocate the amount to cover imports of medicines, vaccines, and baby formula.

Source: Daily News Egypt

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