When the Central Bank of Egypt revealed that it would adopt a flexible exchange rate system that would reverse the exchange of the pound against foreign currencies according to supply and demand forces. The pound-to-dollar exchange rate approached an all-time low of 24.
In fact, Egyptians weren’t the only ones who seemed enamored with the tendency to balance the pound’s fluctuations.And here’s where the story begins, reports a local Arabic-language daily.
Far from the Central Bank of Egypt’s goal of supporting the local currency, there are two types of people affected by the sterling volatility decision. The first group is the negative teams that have existing investments in Egypt in the form of bank balances. With this decision, this team still finds itself exposed to unspecified losses, as its measurement continues to depend on the amount of money he has in the Egyptian market.
It is worth noting that the majority of Gulf workers do not accept the official exchange rate of the dollar and therefore do not rely on remittances on the official market and rely on the black market for better exchange rates. is. , and here followed by individual Kuwaitis, and some ventures in the Egyptian market.
In brief reading, the circle of losers and winners due to pound volatility can be identified from owners of available savings within Egypt or from owners of flows from abroad as follows:
Liquid currency in sterling lost about 25% of its real value after the pound-dollar exchange rate fell from about 19.3 pounds a day before the listing day to more than 24 pounds. Here, the owners of these funds are highly vulnerable if they decide to enter into a hostile transaction by transferring the funds out of Egypt at this time.
The decision has been expected since sterling move talks began between Egypt and the IMF about two months ago, but the move has been somewhat slowed down by high interest rates, which reached 13.5% before the last move. Some depositors expected delays. , to prevent “dollarization” that encourages banks to provide savings tools.
In this case, the most important gainers are dollar depositors. The actual value of the sterling-denominated fund decreased by about 25%, while the value of the dollar-denominated fund increased by the same amount on top of the interest rate. This is a positive reflection for the owners of these deposits, especially those whose exchange dates are approaching or whose holders wish to exchange.
Anyone who has a fixed obligation in the form of installments or payments for property or land in which he has invested will achieve a large profit margin in the float step when equalizing his payments in pounds and the value of the remaining payment obligation will be It will be as follows. Decreases as the purchasing power of the currency of the country in which he works increases.