The latest drop in the Egyptian pound last Wednesday caused the Us dollar viral to spiral more than ever before. Consequently, the value of the Egyptian dollar bonds achieved unprecedented growth, which prompted the Egyptian public to assume that authorities will finally fulfill the IMF’s pending demands.
The Monetary Fund (IMF) has been calling non-stop to make the currency exchange rate flexible, resulting in approving of a 46-month $ 3 B bailout package last October.
On Wednesday, the CBE devalued the Egyptian currency for the third time in a row in the span of one year. That decision has led notes due in 2061 to jump from about EGP 24.70 per dollar to EGP 29.4 and EGP 32.4 per dollar. The increase rate ranges between 5.5% and 7%, which translates to 2.5 cents to 65 cents.
According to the offshore market, derivatives traders expect the US dollar to keep rising to surpass 32 EGP in 2023. Moreover, markets perceive Bloomberg’s compiled pricing data as a good sign and predict that Egypt will soon be prepared to commit to a flexible exchange rate regime.
At the beginning of 2022, the US dollar was worth less than 16 Egyptian pounds, which led many citizens to start trading their currencies. That rising demand for the US currency is the main reason behind its dramatic increase in value within banks and among black market trading as well.