CAIRO: The US dollar has risen against the Egyptian pound over the past few days, reaching 49.25 Egyptian pounds per dollar.
Egyptian economic experts attributed the rise to recent regional developments.
“The biggest factor affecting the dollar price against the pound is Egyptians sending money abroad,” said economic expert Dr. Alaa Ali.
“If the dollar rises, it will either stabilize or fall against the pound, and if the dollar falls, the dollar will rise and the pound will fall,” the economist told Arab News.
“Since the Egyptian government decided to liberalize the exchange rate about eight months ago, there has been a surge in remittances from Egyptians abroad, which has helped stabilize the dollar at around 48 pounds.
“However, recent tensions have led to a decline in foreign currency remittances from Egyptians, which has pushed the dollar price against the pound up by about 1 pound,” Ali said.
“Tourism, investment, exports and remittances from Egyptians are sources of great value for dollar earnings.”
Ali said he expected prices to stabilize again after Egypt secured a third loan of about $800 million from the International Monetary Fund.
Mohamed Shawky, a professor of economic risk management, also commented on why the dollar has been rising against the Egyptian pound recently.
Sharqi cited regional tensions following the assassination of Hamas leader Ismail Haniyeh in Tehran and Iran's threats of military retaliation against Israel.
“The more tense the situation in the region becomes, the more negatively it affects the economic situation,” he told Arab News.
“Importers have been a bit apprehensive about the dollar in recent times, because of regional developments and concerns about instability in the region,” said Matta Beshai, head of the chamber’s import department.
These developments have prompted many to cut back on dollar spending and seek to cut costs in any way possible, “out of fear that a regional situation could explode with Iran threatening to retaliate against Israel.”
He added: “Banks are operating normally and dollar payments are being made to importers normally following the Ras al-Hekma transaction, which has helped facilitate the massive flow of funds within the historic $35 billion investment agreement.”
“The main reason for the dollar's rise in the bank is the tensions in the region, which are spreading fear among investors,” Beshai said.
At the same time, he stressed that the country was “functioning normally and dealing with the crisis effectively”.
