CAIRO – 30 March 2020: "The Egyptian pound exchange rate will rise against the US dollar during the coming period," Governor of the Central Bank of Egypt (CBE) Tarek Amer expected Sunday.
“We must first consider the variables that occur abroad on the balance of domestic payments, before expecting the pound to rise against the dollar,” Amer said during a phone interview with a TV program.
The average dollar price is LE 15.68 for buying and LE 15.78 pounds for selling. With the Egyptian pound’s gains that reached 2.1 percent against the dollar, Capital Economics attributed the rise of the currency to official intervention, “but this raises concern that policymakers haven’t learnt from past mistakes.”
“While the pound has fallen by just over 1 percent against the dollar since late-February, that is a much better performance than other EM currencies over the same period,” Capital Economics added.
CBE’s governor referred to global talks about how Egypt preceded the current conditions by controlling the economy
“Unlike Egypt, pumping loans in Europe has become weak because they have reached the limit of being satisfied and the loan-to-deposit ratio is very high, “Amer said.
He continued,"While in Egypt we still have excess of deposits and liquidity, and we also have scope to lower interest rates more and more in order to stimulate the economy."
The Monetary Policy Committee of the Central Bank of Egypt (CBE) decided earlier to cut the overnight deposit rate, the overnight lending rate, and the rate of the main operation in an emergency meeting by 300 basis points.
The overnight deposit rate, the overnight lending rate, and the rate of the main operation are cut to reach 9.25 percent, 10.25 percent, and 9.75 percent, respectively.
Moreover, credit and discount rates are cut at 9.75 percent from 12.75 percent.