Pounds rose 71 pounds .. Pound strengthens gains against dollar



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The Egyptian pound gained gains against the dollar since the beginning of 2019, increasing by 71 piasters, which experts attributed to the decline in demand for the dollar, and increased flows

The US dollar exchange rate has fallen by 71 piasters since the beginning of 2019, reaching a two-year low of 17.24 pounds for the sale, compared with about 17.95 pounds at the end of last year's 2018.
The Egyptian pound rose last week by about 11 piasters against the US currency to hit its bargained price last Thursday at 17.25 pounds per dollar, the highest level since March 2017.
The average green currency price at banks is currently around 17.24 pounds for sale, and 17.14 pounds for purchase, according to data from the Central Bank of Egypt.

Low demand
According to dr. Muhsen Khudair, a bank specialist, the decline of the dollar is due to several reasons, including a significant drop in demand, in addition to an abundance of dollar supply in banks due to the high volume of cash flows in foreign currency, especially remittances from Egyptians to the outside.
Khudair added that in the event of a low supply of

Low demand

According to dr. Muhsen Khudair, a bank specialist, the decline of the dollar is due to several reasons, including a significant drop in demand, in addition to an abundance of dollar supply in banks due to the high volume of cash flows in foreign currency, especially remittances from Egyptians to the outside.

Khidair added that if the supply of green money in banks is reduced, the dollar is expected to float and return to the pound sterling again.

Egyptian shipments abroad have soared to about $ 29 billion by the end of 2018, compared with $ 18.2 billion in 2017, an annual increase of 17 percent, according to a World Bank report.

According to a report issued by investment bank Beltone, the pound will continue to rise against the dollar by the middle of next year 2020. The bank also reduced its forecast for the green card price to the local currency to an average of 17.1 pounds in the next fiscal year 2019-2020, compared to about 18.05 pounds Previous

Read also: Price of the dollar on Sunday, April 21, 2019 in the banks

Foreign investors' funds transfer mechanism

Mohamed Abu Pasha, a financial analyst, said the fall of the dollar against the pound was due to the cancellation of the foreign transfer mechanism, which was the reason for the increase of the dollar against the local currency in recent years.

Abu Pasha added that the decline of the green currency is also due to the market waiting for the lower level and therefore weak domestic demand.

In December, the Central Bank decided to cancel the mechanism of transfer of funds to foreign investors and explained that the decision does not apply to the balances within the mechanism of transfer of funds of foreign investors before December 4. Interbank

The cancellation of the money transfer mechanism of foreign investors contributed to an increase in the supply of banks in dollars and the entry of new flows of dollars directly in the banking sector.

Investments by foreign investors in Treasury securities rose for the second consecutive month, registering about $ 14.2 billion at the end of February, compared with $ 13.2 billion in January 2019, according to central bank data.

Read also: Minister of Finance: The pound improved and disappointed the rumormakers

Increase in foreign currency flows

Hani Farahat, an economist and financial analyst, said the fall in the dollar was due to the increase in foreign currency inflows resulting from the cancellation of the foreign investor transfer mechanism that directly affected interbank liquidity and directly affected the volatility of the pound against the dollar.

The volume of currency flows received by the Central Bank of Egypt since the liberalization of the pound exchange rate in November 2016 reached about 150 billion dollars, according to central bank governor Tariq Amer.

Foreign currency inflows increased by about $ 42 million last week, according to Tariq Fayed, the bank's chairman.
Fayed pointed out that the interbank market is going through cash flows from global investment funds to invest in the Egyptian pound, which strengthened the pound's strength against the dollar.

In November 2016, the Central Bank decided to liberalize the exchange rate and the pricing according to the mechanisms of supply and demand, so that the government or central bank does not intervene directly or in any way, being automatically determined in the currency market through the supply and demand mechanism.

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