The Egyptian pound is confusing the market and traders



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While a number of analysts attributed the Egyptian pound The central bank intervened directly to move the currency after stabilizing for about a year, which is generally denied by the central bank, noting that it does not intervene in the exchange rate, others believe that this is a result of the flows of foreign investors in instruments of debt.

At 07:30 GMT, the average selling price was Dollar At the seats for the public 17.75 pounds compared to 17.95 pounds for the dollar, Sunday.

This is the pound's strongest level against the US currency since May 2018, according to "Acon Reventive" data.

He did not answer Governor of the Central Bank, Tariq Amer, so far in Reuters requests to comment on the sudden rise in the price of the pound.

Was Amer Bloomberg said last week that the currency will see more "Oscillation" After the end of the mechanism of transfer of funds from foreign investors, investors will have to deal with the interbank foreign exchange market.

In December, Egypt ended the mechanism that guaranteed foreign investors who wished to sell their Egyptian bonds to transfer their money abroad in dollars.

Egypt released the dollar in December.

Egypt is carrying out a series of austerity measures under the terms of a $ 12 billion loan program International Monetary Fund It was signed at the end of 2016.

The central bank kept interest rates unchanged at the December meeting.

The last step in interest rates was in March 2018, when overnight deposit and loan yields cut 100 basis points to 16.75% and 17.75%, respectively.

"There is no doubt that this is not the case," said Mohamed Abu Pasha, an Egyptian economist at investment bank Hermes. "It was expected that fluctuations in local currency prices against the dollar after the end of the monetary mechanism of the transfer of foreign funds … We saw large foreign inflows last weekend in the market debt instruments."

"There was a concern of the dollar holders of a fall in prices, which led them to sell amidst the increase in the supply of demand … the volatility will continue according to the volume of cash flows. to the pound is 17.90 to 17.95 pounds this year, but we can change expectations after what happened on Sunday. "

According to the latest data available, foreign investments in government debt instruments reached US $ 14 billion by the end of September, against US $ 17.5 billion at the end of June and US $ 23.1 billion at the end of March 2018.

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While analysts attribute the rise of the Egyptian pound to central bank intervention to move the currency after stabilizing for about a year, which is generally denied by the central bank, noting that it does not intervene in the exchange rate, others saw this as a result of the flow of foreign investors in debt instruments.

At 07:30 GMT, the average selling price of the dollar at banks to the public was 17.75 pounds, compared with 17.95 pounds to the dollar on Sunday.

This is the strongest level of the pound in relation to the US currency since May 2018, according to the data from Recenton Akon.

Central Bank President Tariq Amer has so far not responded to Reuters's requests to comment on the sudden hike in the pound price.

Aamir told Bloomberg last week that the currency would see more "volatility" after the end of the money transfer mechanism for foreign investors, as investors would have to deal with the interbank foreign exchange market.

In December, Egypt ended the mechanism that guaranteed foreign investors who wished to sell their Egyptian bonds to transfer their money abroad in dollars.

Egypt released the dollar in December.

Egypt has been carrying out a series of austerity measures under the terms of a $ 12 billion loan program from the International Monetary Fund, which it signed in late 2016.

The central bank kept interest rates unchanged at the December meeting.

The last step in interest rates was in March 2018, when overnight deposit and loan yields cut 100 basis points to 16.75% and 17.75%, respectively.

"We were expecting a fluctuation of the local currency against the dollar after the currency ended with the foreign currency transfer mechanism," said Mohamed Abu Pasha, an Egyptian economist at investment bank Hermes.

"There is a concern of the dollar holders about the fall in prices, which pushed them to sell amid the increase in supply … Volatility will continue according to the volume of cash flows Our projection for the average price of the dollar against the pound is 17.90 to 17.95 pounds this year, but we can change expectations after what happened on Sunday, "he said.

According to the latest data available, foreign investments in government debt instruments reached US $ 14 billion by the end of September, against US $ 17.5 billion at the end of June and US $ 23.1 billion at the end of March 2018.

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