An employee counts Egyptian pounds in a bank in Cairo, Egypt, November 3, 2016. REUTERS/Mohamed Abd El Ghany
CAIRO, Dec 20 (Aswat Masriya) - The Egyptian pound further depreciated against the dollar mid-Tuesday, reaching a selling price of 19.75 in some banks compared to between 18.95 and 19.15 on Monday.
The dollar’s highest selling prices were seen at the Egyptian Gulf Bank and Misr Iran Development Bank. Meanwhile, government-owned banks; Banque Misr, Al Ahli Bank and Banque du Caire sold dollars at the lower rate of EGP 19.2.
On Monday, the Egyptian pound declined by more than 0.8 to the dollar in banks after being stable for three days.
A banker told Reuters that reason behind the decline of the Egyptian pound is an increase in dollar requests towards the end of the year as companies are "closing their books or seeking to repatriate profits."
Senior Economist at Arqaam Capital Reham al-Dosouky said that a decline in the Egyptian pound’s exchange rate against the dollar depends on the inflow of foreign currency “by the beginning of the new year” in the form of investments in treasury bonds and stocks.
Egypt's stock market rose sharply in early trade on Tuesday, as the main index EGX 30 went up 3.4 per cent, at 12,149 points, an all-time high.
The stock market has been witnessing an uptrend since the flotation as stock prices become more appealing to foreign investors due to a weakening currency.
Egypt floated the pound on Nov. 3 and raised interest rates by 300 basis points in a dramatic move welcomed by businesses as the key to unlocking investment.
Egypt's dollar peg had drained the central bank's foreign reserves, which have been hit by reduced foreign investment following political turmoil in the past few years, forcing the bank to impose capital controls and ration dollars.