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Egypt sees significant decline in US dollar exchange rate at the black market

The US dollar exchange rate in the black market witnessed a new decline by about LE20 on Saturday, falling to LE43.

It previously declined to LE63 a week ago, following the government’s announcement of attracting new investments and the completion of the Ras al-Hikma deal, which fed the budget with US$35 billion.

This latest decline came with Prime Minister Mostafa Madbouly’s announcement, during the government meeting last weekend, that Egypt had received five billion dollars from the first installment of the deal, and that the other five billion arrived on Friday.

Madbouly indicated that measures have been taken to coordinate between the Central Bank of Egypt and the UAE’s side of the Ras al-Hikma deal, to transfer five billion from the deposit into pounds.

Banking expert Hani Abul-Futouh said that the reality of the decline of the pound against the US dollar at the CBE still exists.

However, he explained that following the decline in the dollar’s value in the black market, this would in fact work to reduce the consequences of the decline of the pound against the dollar.

The closer the dollar exchange rate in the parallel market is to the official dollar exchange rate in banks, the stronger the value of the pound, he pointed out.

Abul-Futouh continued that the scenario of devaluing the currency by the CBE still remain, and that the parallel market will continue to suffer from price confusion.

However, the price will range between LE 43-52, and will not witness any further increase, he assured.

Economic expert Ashraf Ghorab stated that Egypt’s recent signing of the Ras al-Hikma project is one of the most important factors that led to the decline of the dollar exchange rate in the parallel market.

The coming period will undoubtedly witness a significant improvement in the provision of foreign exchange, he said.

Ghorab added that this gives the government the ability to control and eliminate the black market for currency, after providing hard currency in banks to importers.

This will contribute to moving the wheel of the economy, raising production, increasing the supply of goods, and reducing the cost of production, he said.

Edited translation from Al-Masry Al-Youm

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