After that, he touched Egyptian Pound Its lowest level ever at 22.5 pounds to the dollar, according to Refinitiv data.
Conference recommendations
The economic conference concluded its work, Tuesday, with 3 recommendations related to monetary policy she:
- Flexibility of the exchange rate to reflect the market dynamics of supply and demand as a tool to absorb external shocks.
- Working on activating the derivatives market for currency and futures contracts as a hedging tool against the risks of fluctuation exchange rate.
- Issuance of an index of the Egyptian pound, denominated in some currencies, for the most important trading partners and gold.
quick treatment
And come back professor Finance And investment, Mustafa Badra, the central bank’s decision regarding the interest rate and the value of the pound, that it came in response to the recommendations of the economic conference to set a flexible exchange rate, which began on Wednesday by announcing the trend to cancel documentary credits.
announced central bank It will also begin phasing out guidance it adopted in March on the use of letters of credit to finance imports, with a goal of eliminating them completely by December, which has caused bottlenecks for importers, as imports of consumer durables fell 57 percent between April and June.
Badra considered that "raise interest rates With 200 basis points, it is the quick treatment for inflation levels that exceeded what the Central Bank aims at, which is 7% on average during the fourth quarter of 2022, especially since confronting it in the contracts and derivatives market requires a great time that the market and the citizen cannot bear.".
As for the exchange rate, the economist indicated that the decision is left to the banks to determine the appropriate exchange rate for them according to market mechanisms.
The decisions of the Central Bank were preceded by a day before the government announced the social protection package, which amounts to about 67 billion pounds, and fixed prices electricity And gas in order to calm the fears of the industrial sector and support the most favored groups.
IMF agreement
Badra linked the exchange rate decision and Egypt’s talks with monetary fund About loans, saying the decision "It will speed up the passage of the agreement between the two sides".
For her part, Professor of Economics at Cairo University Omnia Helmy confirmed that the Central Bank’s decision is a proactive step in preparation for signing the agreement at the expert level with the IMF.
She explained that the exchange rate decision is also an attempt by the Central Bank to prevent the exchange rate fluctuation.
Following the decision, he issued National Bank of Egyptthe largest government bank in the country, Thursday, a 3-year certificate with an annual return of 17.25 percent, paid annually, as it issued Egypt Bankthe second largest government bank, offers 3-year certificates with the same return, and is paid annually.
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According to the decisions, the deposit return rate has increased and lending Overnight 13.25 percent and 14.25 percent, respectively.
After that, he touched Egyptian Pound Its lowest level ever at 22.5 pounds to the dollar, according to Refinitiv data.
Conference recommendations
The economic conference concluded its work, Tuesday, with 3 recommendations related to monetary policy she:
- Flexibility of the exchange rate to reflect the market dynamics of supply and demand as a tool to absorb external shocks.
- Working on activating the derivatives market for currency and futures contracts as a hedging tool against the risks of fluctuation exchange rate.
- Issuance of an index of the Egyptian pound, denominated in some currencies, for the most important trading partners and gold.
quick treatment
And come back professor Finance And investment, Mustafa Badra, the central bank’s decision regarding the interest rate and the value of the pound, that it came in response to the recommendations of the economic conference to set a flexible exchange rate, which began on Wednesday by announcing the trend to cancel documentary credits.
announced central bank It will also begin phasing out guidance it adopted in March on the use of letters of credit to finance imports, with a goal of eliminating them completely by December, which has caused bottlenecks for importers, as imports of consumer durables fell 57 percent between April and June.
Badra considered that “raise interest rates With 200 basis points, it is the quick remedy for the levels of inflation that exceeded what the Central Bank aims at, which is 7% on average during the fourth quarter of 2022, especially since confronting it in the contracts and derivatives market requires a great time that the market and the citizen cannot bear.
As for the exchange rate, the economist indicated that the decision is left to the banks to determine the appropriate exchange rate for them according to market mechanisms.
The decisions of the Central Bank were preceded by a day before the government announced the social protection package, which amounts to about 67 billion pounds, and fixed prices electricity And gas in order to calm the fears of the industrial sector and support the most favored groups.
IMF agreement
Badra linked the exchange rate decision and Egypt’s talks with monetary fund About the loans, saying that the decision “would accelerate the passage of the agreement between the two sides.”
For her part, Professor of Economics at Cairo University Omnia Helmy confirmed that the Central Bank’s decision is a proactive step in preparation for signing the agreement at the level of experts with the IMF.
She explained that the exchange rate decision is also an attempt by the Central Bank to prevent the exchange rate fluctuation.
Following the decision, he issued National Bank of Egyptthe largest government bank in the country, Thursday, a 3-year certificate with an annual return of 17.25 percent, paid annually Egypt Bankthe second largest government bank, offers 3-year certificates with the same return, and is paid annually.