Regional tensions drive up dollar against Egyptian pound

The price of the US dollar rose against the Egyptian pound over the past few days, with one dollar worth 49.25 Egyptian pounds. (Reuters/File)

• Authorities dealing with situation effectively, economist tells Arab News
• The biggest factor affecting the price of the dollar against the pound is the remittances of Egyptians abroad

CAIRO: The price of the US dollar rose against the Egyptian pound over the past few days, with one dollar worth 49.25 Egyptian pounds.
Egyptian economic experts attributed the rise to recent regional developments.
“The biggest factor affecting the price of the dollar against the pound is the remittances of Egyptians abroad,” said Dr. Alaa Ali, an economic expert.
“If it rises, the dollar price will stabilize or decline against the pound, and if it declines, the dollar price will rise, and thus the pound price will decline,” the economist told Arab News.
“Remittances from Egyptians abroad have been high since the decision to liberalize the exchange rate taken by the Egyptian government about eight months ago, which contributed to the stability of the dollar price at about 48 pounds.
“However, with the recent tensions, remittances from Egyptians in foreign currencies have decreased, and thus the dollar price against the pound has increased by about a pound,” said Ali.
“The sources of tourism, investment, exports, and Egyptians’ remittances have a great value in the dollar proceeds.”
Ali said he hoped the price would stabilize again with Egypt obtaining the third tranche of its International Monetary Fund loan, which exceeded approximately $800 million.
Mohamed Shawqy, professor of economic risk management, also commented on the reasons behind the recent increase in the price of the dollar against the Egyptian pound.
Shawqy referred to regional tensions and the threat of an Iranian military response against Israel following the assassination of Hamas leader Ismail Haniyeh in Tehran.
He stressed to Arab News: “The more tense the situation in the region is, the more negatively the economic situation is affected.”
The head of the Importers Division at the Chambers of Commerce, Matta Beshai, said: “The past period witnessed a kind of reservation among importers regarding the dollar, fearing regional events and instability in the region.”
These developments “prompted a large number to reduce spending in dollars and work to reduce costs in all possible ways, fearing an explosion of the regional situation in light of Iranian threats to retaliate against Israel.”
He added: “Banks are operating normally, and dollars are being disbursed to importers normally after the Ras Al-Hekma deal, which helped in large financial flows within a historic investment agreement that reached $35 billion.”
Beshai said that “the main reason for the rise in the dollar price in banks is the tension in the regional situation, which led to clear fears among investors.”
At the same time, he stressed that the state was “working normally and dealing with the crisis effectively.”