An employee counts U.S. dollars in a foreign exchange office in central Cairo, Egypt. AFP
The latest closing was on 17 March, when the futures recorded EGP 39.42 per US $1.
Egypt is suffering a US dollar gap amid the repercussions of the Russia-Ukraine war that resulted in the exodus of $25 billion in hot money from the local market.
The Monetary Policy Committee (MPC) of the Central Bank of Egypt (CBE) will convene on 30 March to review the key interest rates. The local market is anticipating a new devaluation of the Egyptian pound against the US dollar, as Egypt is committed to the International Monetary Fund (IMF) to adopt flexible exchange and interest rates.
It is expected interest rates will hike. Headline annual inflation exceeded 31 per cent in February, while the core inflation surpassed 40 per cent.
Until February, the US dollar traded for EGP 34-35 in the parallel market, which had been active since the first devaluation of the Egyptian pound in December. Moreover, some importers were experiencing trouble opening letters of credit (LCs) for their imports as a result of the shortage of the US dollar.
Since December, the US dollar price has risen to 100 per cent against the Egyptian pound, traded currently at over EGP 30.9.
The surge in the futures value signals a further devaluation of the Egyptian pound over the coming few days.
Egypt is currently under the first review for its Extended Fund Facility (EFF) which allows it to receive a total loan of $3 billion over 46 months from the IMF. The fund has yet to announce the review’s results.