US dollar exchange rate hikes in Egypt alarming new devaluation of the pound

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Tuesday, the US dollar price witnessed a new high against the Egyptian pound in official banks and the parallel market. The US dollar price broke the barrier of 30 Egyptian pounds in the parallel market, while its price in banks and exchange companies ranged between 24.61 and 24.64 Egyptian pounds. Its price in the Central Bank reached 24.66 Egyptian pounds for sale and 24.58 Egyptian pounds for purchase.

Experts have said that the government’s monetary policy will push the local currency to sink further. The high dollar price leads to confusion in the local market, instability in the prices of daily commodities, and an increase in production and operating costs. Merchants have been facing a crisis in importing goods since the beginning of 2022 due to the lack of hard currency locally, in addition to the Central Bank placing restrictions on imports.

The Central Bank has said that net foreign assets declined by 109.9 billion pounds in October, continuing a fall that began in September 2021. The deficit in foreign assets thus amounts to 551 billion pounds. Net foreign assets in the banking sector had begun to decline since October 2021 and then turned to a negative value starting in February, in conjunction with the Russian-Ukrainian war. In September 2021, before the decline, net foreign assets recorded 248 billion pounds. Despite a recent agreement with the International Monetary Fund and the Central Bank devaluing the local currency by more than 57% in less than a year, the hard currency issue in Egypt still needs to be resolved.