A few days ago, Bloomberg Agency pointed out that the increasing pressure on the Egyptian economy had led the largest banks in the world to believe that Cairo needed to weaken its currency again.
The agency cited analyzes of the Deutsche Bank, Goldman Sachs and Citigroup in which they stated that the Egyptian currency is overvalued, even after devaluing it by more than 15 percent in March, where Deutsche Bank and Goldman Sachs stated that the pound is overvalued by 10 percent, but Citigroup has an undervalue of 5 percent, reports a local Arabic daily.
The sources stressed that greater flexibility of the Egyptian currency has become a necessity in light of Cairo’s pursuit of a new loan from the International Monetary Fund.
Experts argue that the black market for currencies of countries that have a fixed or partially floating exchange rate with the dollar, such as Egypt, usually thrive while convertible foreign currencies are available.
They said, the weakness of the pound is currently driven by the decline in cash flows from foreign currency, amid open talk about Egypt’s need to pay about $30 billion within months, and the lack of strong indicators confirming the possibility of repayment so far.”
The exchange of the pound on the black market recently recorded an additional double, reaching, however, a price lower by about 1.5 Kuwaiti dinars than what is used in the lowest-priced exchange companies, which at the same time carried out transfers of 16.2 dinars per thousand pounds, which carries a price decrease of about 10 percent.
According to a group of traditional remittance dealers whose opinion was surveyed by the daily in this regard, reported that when they finally transferred their usual monthly money to their families and related to installments owed to them, what they called remittance dealers offered them to implement them at very distinct prices, whether when compared to official prices, or when measured at a cost. their previous transfer.
They explained that they had finally obtained an additional discount compared to what was offered to them in the official market, ranging between 1.4 and 1.5 dinars for every thousand pounds, compared to a quarter and a half of the dinars they were receiving weeks ago.
They pointed out that months ago, they were paying remittance traders the same official exchange rate, in addition to paying between half a dinar and a dinar for each transfer ranging between one thousand and five thousand pounds, under the name of the home delivery bill, indicating that something had changed in the recent period by decreasing the value of the exchange rate on the black market by about half a dinar compared to the official market, to finally increase the margin until it reached about 1.5 dinars for every thousand pounds.
They reported that the black market for the Egyptian pound in Kuwait is involved in hectic activity, after being restricted for many years, specifically since the Egyptian central bank floated the currency, noting that it was noticed in the recent period that the activity of remittances to Egypt by individual traders in the market has increased. The black market or what is known as the under-economy of the pound, to the extent that the exchange companies, even known about them, started offering lower prices, losing part of their market share.
The Acting Governor of the Central Bank of Egypt, Hassan Abdullah continues his meetings which included a number of ministers and prominent officials in the Egyptian government, in addition to officials of local banks, it was noted that the exchange market witnessed a state of stability despite the slight rise of the dollar against the Egyptian pound.
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