Although inflation is anticipated to decline over the following several years, a Reuters poll indicated that the price of the Egyptian pound against the dollar will decline at a faster rate than anticipated.
According to a Reuters survey conducted from October 10 to October 19, the Egyptian pound’s exchange rate against the dollar, which was 19.61 yesterday, Wednesday, is predicted to fall to 21.16 by the end of the current fiscal year and to 22.08 by the end of the following fiscal year.
By the conclusion of the fiscal year 2023–2024, participants in the survey in July anticipated a smaller decline in the value of the Egyptian pound, to 19. 86 to the dollar.
It was indicated that the exchange rate flexibility increased as a condition for a new financing that Egypt sought this year from the International Monetary Fund, at a time when the Russian -Ukrainian war increased pressure on the country’s public finances.
Within a few weeks, foreign investors withdrew almost $20 billion from the Egyptian market for treasury instruments, even as the price of oil and grains rose due to pressure.
The Monetary Fund and Egypt announced this week that an agreement on a fresh loan has become likely. Egypt started allowing the value of its currency to decline in March, when it was trading at 15.70 pounds to the dollar.
Continue reading about how the Egyptian pound will fare against the dollar by the end of 2022.
Constant argument!
According to Oxford Economics’ Kali Davis, “given the pressure of inflation, we expect that the government will continue to permit the currency to depreciate at a steady and gradual rate, rather than opting for a precipitous loss in value.”
Egypt’s inflation rate reached its highest point in four years in September, rising to 15%.
Economists expected the low levels of inflation in the coming years to reach 12. 8% by the end of the current fiscal year in June 2023 and 11.
The following year, 6%.
However, compared to July, when it hit 10.0% and 10.4% over the previous two years, those forecasts are greater.
The chief economist at Al -Baraka Bank, Mona Badir, said that high expectations are based on pressure on the Egyptian currency and the uncertainty about the prices of energy and global food that the war moved largely.
The expectations of economists for growth in Egypt were dashed by high inflation rates and the value of the currency, which caused it to fall below 6.6% in the fiscal year that ended in June.
View more: The exchange rate between the fair dollar and the pound. According to Bloomberg Economics, it is at this level!
5% increase was predicted by experts for the current fiscal year and 5% growth for 2023–2024. The administration stated that it wants to see growth of 5%.
Davis predicted that domestic demand would deteriorate in the second half of next year because inflation would continue to be strong in the next months.
Given the continued poor growth, economists expected to unemployment varied, but they expected the lending price stability at 12. 25% in the current fiscal year..
By the end of 2022, the value of the Egyptian Pound relative to the Dollar will fall.
About Author
