The Egyptian pound took yet another hit, depreciating for the third time this year.
The Egyptian pound continues to depreciate in value as Egypt’s Central Bank has announced that the latest dollar sale is now set at 7.93 per dollar from 7.83, according to three traders speaking to Reuters on Sunday.
Egyptian pound woes continue as many economists believe that the pound is overvalued, which is why the pound has weakened to 7.93 from 7.83 on Thursday. This declining value is the result of post 2011 revolution turmoil dwindling Egypt’s foreign currency reserves. Before the 2011 revolution Egypt's reserves stood at $36 billion - a far cry from 2015’s end of September report which estimates current reserves at $16.335 billion down from $18.1 billion recorded in August. This is the third straight month that the country's net foreign reserves have plunged, despite billions of Gulf Aid donated to Egypt to shore up its currency.
Traditionally the Central Bank of Egypt permits the dollar to be traded up to 0.10-0.15 pounds above or below the official rate, which may mean that you find some exchanges offering an 8.03-8.08LE/dollar. In an attempt to stabilise the pound Finance Minister Hany Kadry announced that the government would be seeking a $3 billion loan from the World Bank. Hopefully the loan is granted and the Egyptian pound stabilises as HSBC forecasts that the pound could reach 9LE per dollar by the end of the second quarter of 2016.