The dollar rose in Egypt on Tuesday, coinciding with the rise in the interest rate on government treasury bills in Egypt for the first time since the exchange rate was liberalized in March, according to Central Bank of Egypt data.
The Central Bank of Egypt (CBE) announced on Monday the sale of 91, 273, 182 and 364-day treasury bills worth EGP 71.1 billion, equivalent to about USD 1.4 billion, during an auction.
Treasury bills are short-term government debt instruments issued for periods ranging from three months to one year.
Banks and institutions have made 70 offers for 273-day treasury bills worth EGP 38.37 bln, at an interest rate of 29.62%. In addition, 420 offers were made for 91-day bills, worth EGP 71.44 bln, at an average interest rate of 29.03%.
Institutions also received 150 offers of 182-day bills worth EGP 41.16 billion, at an interest rate of 29.99%, and 97 offers of 364-day bills worth EGP 54.75 billion, at an interest rate of 28.88%.
On the other hand, the Finance Ministry approved 14 offers of 273-day treasury bills worth EGP 1.12 billion, with a weighted average return of 26.903%. It also accepted 389 91-day offers worth EGP 50.308 billion, at an interest rate of 28.33%, 102 182-day offers worth EGP 4.14 billion, with a weighted average return of 27.75%, in addition to 43 offers for 364-day bills worth EGP 15.57 billion, at an interest rate of 26.24%.
Fitch Solutions’ BMI believes the Egyptian government is keen to let the exchange rate fluctuate, a requirement of the IMF’s program, which will be reviewed at the end of the year. The authorities will continue to intervene to prevent sharp fluctuations in the exchange rate.
The government intervened to support the pound on April 15 during the first round of tensions between Iran and Israel, and on August 5 during the second round, with the pound stabilizing around $49.2 between August 5 and 8.
In 2025, BMI expects the pound to depreciate by 2% to EGP 49.67 by the end of the year, as external financial factors such as large trade deficits and rising debt repayment bills continue.
The company put forward scenarios for the movement of the value of the pound according to the development of the conflict. The first optimistic scenario predicts a rapid de-escalation of geopolitical tensions in the region, such as a ceasefire in Gaza, which could boost the value of the pound to between 46.5 and 48.5 pounds.
The second pessimistic scenario predicts that the pound will fall beyond 49.5 pounds to the dollar, and possibly 55 pounds in the short term, which could lead to more investment outflows and a decline in foreign exchange reserves.
Dollar today against the Egyptian pound
The US dollar maintained its 49 level of rise against the Egyptian pound in all Egyptian banks during today’s trading.
The highest price of the dollar so far against the Egyptian pound was recorded at the National Bank of Kuwait, reaching levels of 49.38 for buying and 49.48 for selling.
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