CAIRO: The US dollar has appreciated against the Egyptian pound over the past few days, with one dollar trading at 49.25 Egyptian pounds.
Egyptian economic experts attribute the growth to recent regional developments.
“The biggest factor affecting the price of the dollar against the pound is remittances from Egyptians abroad,” said Dr. Ala Ali, an economic expert.
“When it rises, the price of the dollar stabilizes or falls against the pound, and when it falls, the price of the dollar will rise and thus the price of the pound will fall,” the economist told Arab News.
“Remittances from Egyptians abroad have been high since the decision to liberalize the exchange rate by the Egyptian government about eight months ago, which helped stabilize the price of the dollar at around 48 pounds.
“However, due to the recent tensions, remittances by Egyptians in foreign currency have decreased and thus the price of the dollar against the pound has increased by about a pound,” Ali said.
“Egyptians' sources of tourism, investment, exports and remittances are of great value in terms of dollar earnings.”
Ali expressed hope that the price will stabilize again when Egypt receives the third tranche of an International Monetary Fund loan of more than approximately $800 million.
Mohamed Shoki, a professor of economic risk management, also commented on the reasons for the recent increase in the value of the dollar against the Egyptian pound.
Shoki cited regional tensions and the threat of Iran's military response to Israel following the assassination of Hamas leader Ismail Haniyeh in Tehran.
He stressed to Arab News: “The more tense the situation in the region, the more negatively it affects the economic situation.”
Mata Beshai, head of the importers department at the Chambers of Commerce and Industry, said: “Last period there was some reservation among importers regarding the dollar, fearing regional events and instability in the region.”
These events “encouraged large numbers to cut their dollar spending and work to reduce spending in every possible way, fearing an explosion of the regional situation in light of Iran's threats to retaliate against Israel.”
He added: “Banks are operating as normal and dollars are being paid out to importers normally after the Ras Al Hekma deal, which helped in large financial flows in a historic investment deal that reached $35 billion.”
Beshai said that “the main reason for the increase in the dollar in banks is the tension in the regional situation, which caused obvious fears among investors.”
At the same time, he emphasized that the state “works in normal mode and effectively copes with the crisis.”
