The value of the US dollar declined to EGP 9 in the informal market for the first time in several weeks, recording approximately EGP 8.97 for purchase and EGP 9.10 for sale.
The price decline in the black market was due to the recent actions taken by the Central Bank of Egypt (CBE), which mainly concerned lifting the cap on withdrawals and deposits in foreign currency for individuals and strategic importers, as well as providing $500m for banks to cover the cost of importing a number of commodities.
Sources from the informal market said dealers are in a state of disarray, in anticipation of further action to be taken by the CBE, which would again cause them losses, repeating last week’s trends.
There was previous speculation that the value of the US dollar would hit EGP 9.70 in the informal market. The decline of the US dollar by 70 piasters since last Sunday caused major losses for both dollar owners and speculators.
Banks are awaiting the launch of a new exceptional auction for selling dollars by the CBE within hours, which will cover the remainder of their pending applications for dollars for the importation of food commodities and medicine production materials.
The CBE requested that banks prepare a list of their pending dollar-based requests for importing strategic food commodities. These exclude goods imported by the General Authority for Supply Commodities (GASC), machinery and production equipment, spare parts, intermediate goods, production requirements and raw materials, medicines and vaccines, and chemicals.
Osama El-Manialawy, the assistant general manager of the treasury at a private banks operating in the local market, expects that the new CBE exceptional auction for dollars will reduce demand on the US currency and lead to a further decline in the US dollar’s value against the Egyptian pound in the informal market.
He noted that the market required the CBE to inject dollar liquidity again, to ensure that the value of the US dollar against the Egyptian pound does not increase at the same rates recently recorded.