Egyptian pound’s value rises

[DJKeefy]

The value of the Egyptian pound increased against the USD on 26 August and 27 August, following a low-turnout at political demonstrations on the preceding Friday.

According to currency exchange dealers, the dollar is officially bought for EGP 6.9868 and sold for 7.0168; in the black market, the value of the Egyptian pound against the US dollar rose, with the greenback dropping from EGP7.25 to EGP7.10.

“The low-turnout was a sign that the country is regaining stability, and this helped in strengthening the Egyptian pound,” said Gamal, the owner of an exchange retail shop.

An employee at Misr Exchange Office attributed the change to the depreciation of the US dollar and not the increase of the Egyptian pound. “Currently there is no liquidity in the local currency and the demand for the dollar is down. Meanwhile, the demand on the Egyptian pound is on the rise,” he said. “The value of the Egyptian pound compared to the dollar in the black market is extremely close to the official value at the Central Bank of Egypt,” the employee added.

On 26 August, the central bank reported that domestic liquidity rose to EGP 1.268tn at the end of May compared to EGP1.094tn at end of June last year, registering an increase of 15.9% during the 2012/2013 fiscal year.

Another dealer at Arab Exchange Group stated that aside from the liquidity problem, there are several factors that affect the EGP-US value adding that the value of the Egyptian pound was weakening prior to the 14 August violence.

On 14 August, sit-ins supporting ousted president Mohamed Morsi were violently dispersed and affected the value Egyptian pound against the US dollar on the black market. Gamal previously stated that the pound had witnessed a minimal recovery when its value recessed, increasing the price of the US dollar rise to EGP 7.20, compared to EGP 7.05 in July.

During the same period the US dollar per Egyptian pound ratio was said to have strengthened to EGP 6.98 at a central bank foreign currency auction on Thursday after a drop in value following Morsi’s overthrow on 3 July, according to Reuters.

The US dollar depreciated against the Egyptian pound to reach EGP 6.99 after reports of the $12bn pledged Gulf aid earlier in July.

Source: http://www.dailynewsegypt.com/2013/08/2 ... lue-rises/

[Brian Yare]

The value of the Egyptian pound increased against the USD on 26 August and 27 August, following a low-turnout at political demonstrations on the preceding Friday.

I tend to monitor the political climate by the price of Centamin, the Egyptian gold-miner near to Marsa Allam.

Recently the share price has been rising, showing an increasing confidence in the Egyptian government to solve their problems.

But I am not sure why one of their subsidiaries in Ethiopia, Nyota, has put on 22% today!

[A-Four]

I think you may find this rise has more to do with the fall of the Indian Rupee, which has fallen by as much as 16 %, therefore many, shall we say not too wise people there are looking towards the Egyptian Bond Market, which I notice, is promising everything,........but guaranteeing nothing.

[Hafiz]

The Egyptian exchange doesn't behave like normal exchanges because most shares are owned by Egyptians and therefore don't reflect international confidence. It also seems to work like a roulette table.

The big increase in the money supply suggests that the central bank is printing a lot of money and this usually ends in tears. Might also be a reason the stock exchange is behaving better than the economy.

Centamin is an odd thing. A big increase in their price against a weakening in international gold prices suggests they have found something. They are tough customers working in tough places or maybe they are just risk taking Australians.