Experts.. Fixing the interest rate will not affect the exchange rate of the Egyptian pound

The panel of experts confirmed that the interest rate fixing by the Central Bank of Egypt will not affect the pound for the time being, as the Central Bank is pursuing a policy of gradual floatation in light of external economic pressures.

Honey Jenena, an economist and professor at American University, said it was unlikely that a US interest rate hike would affect the price of the pound at this time, pointing to the bank’s ability to withstand the pressure caused by such an increase. the decision was made earlier, but he expected the pound to depreciate further against the dollar in light of pressures, external and internal, estimating the fall of the Egyptian currency to levels of 10-15% to a record 22-23 pounds against the dollar.

Geneina added that the current phase is challenging for Egypt as it tends to push the price of the pound down to 2016 levels, noting that the diversification of foreign exchange sources through a needed International Monetary Fund loan, a strong recovery in the tourism sector and the sale of stakes in large companies by the state would help get out of the crisis, according to Geneina’s statements.

For her part, Sahar El-Damati, banking expert and former vice president of Banque Misr, said the central bank is currently working on a gradual depreciation of the exchange rate and therefore a US interest rate hike would not affect the pound for the time being. time, noting Egypt’s ability to absorb the shock The exit of indirect foreign investment in debt instruments after the Russo-Ukrainian war.

She explained that having high interest rate certificates next to the central policy in the exchange rate would limit the impact of the Fed’s interest rate hike, adding that the central bank is aiming to achieve the real exchange rate of the pound sterling against the dollar in line with developed studies and target period, for its part, taking into account all world economic conditions and local ones.

The Monetary Policy Committee of the Central Bank of Egypt decided at its meeting on Thursday to keep the interest rate on deposits and loans overnight for the third time in a row and for the fourth time this year, so that the price of the main currency is set at 11.25% , 12.25% and 11.25% respectively, maintaining the credit and discount rates at 11.75%.

The dollar fixed at 19.54 pounds and the price of the Egyptian currency is only 3 piastres from the lowest level on record, while the pound has fallen by 24% since its float in March last year.

Source: Cairo 24

Follow AsumeTech on

More From Category

More Stories Today

Leave a Reply