The futures contracts for the Egyptian pound against the dollar fell to LE 38 per dollar for the first time in a year, amid anticipation of a fourth flotation of the pound during the current month.
The future contracts for the Egyptian pound for one month fell to LE 32.4, with the continued decline in the exchange rate in local banks, according to Al-Arabiya.
Since the beginning of March, the exchange rate has witnessed successive declines, heading towards LE 31.
According to Central Bank data, the exchange rate recorded LE 30.77 for purchase and LE 30.88 for sale.
According to Bloomberg, the value of the Egyptian pound declined by more than 6 percent against the dollar on the black market last week, to trade on Monday at about LE 33.5 per dollar, compared to LE 31.5 early last week.
International investment banks expect the pound’s value to continue to decline during the current month by up to 10 percent, with the lack of foreign currency available in banks.
Egypt is facing a foreign currency shortage crisis, the worst in years, in light of the increasing pressure on the pound recently, due to the repercussions of the Russian-Ukrainian war, as the country is actively seeking to attract foreign direct investments and foreign inflows to the local debt market.
In less than a year, the Egyptian pound witnessed 3 declines in its value against the dollar, to reach levels near LE 31 to the dollar.
In January, the International Monetary Fund (IMF) said that Egypt will receive $700 million of the $3 billion loan value during the current year 2023.
Last December, the IMF agreed to disburse the first tranche of the loan amounting to $347 million.
According to the Fund, Egypt faces a financing gap of $17 billion over the next four years, and the IMF loan of $3 billion represents less than 20 percent of this gap.
The fund indicated that the rest of the financing gap is expected to be paid through multilateral creditors and other international institutions, including the World Bank and the Asian Infrastructure Investment Bank, as well as from the proceeds of the sale of state-owned assets to the sovereign wealth funds of Gulf partners.
It added that Egypt will get more than $5 billion before the end of the year from a group of lenders, in addition to that Egypt is expected to get $2 billion by selling some state-owned assets.
The remaining financing will come from the World Bank, the China Development Bank, the Asian Infrastructure Investment Bank, the Arab Monetary Fund and the African Development Bank.
Egypt also obtained assurances that the Gulf countries’ deposits in the Central Bank of Egypt (CBE), amounting to $28 billion, will not mature before the end of the loan program period in September 2026, and will not be used to purchase shares or debts.
Source: Egypt Today Magazine