The Egyptian pound is expected to continue its strong performance during 2020, supported by the successful management of Central Bank of Egypt (CBE) in its monetary policy, controlling inflation rates, and the free market policy in the exchange market.
Experts stressed that the pound will be positively affected by the expected strong performance of tourism and investment sectors in addition to the Suez Canal.
They told MENA news agency that the steady increase in Egypt’s exports and the declining state dependence on imports, especially in the gas sector which will save more than $3 billion, will also have a positive impact on the pound.
Egyptian Economist Mohamed Rushdi expects the Egyptian pound to move more freely in 2020 with the forces of supply and demand as the main driver of the exchange market in Egypt. He noted that the dollar might record at EGP 16.25 as the maximum possible rise of the US currency against the pound.
The expert also predicted the US dollar to fall to levels between EGP 14.90-15.30 during the second half of 2020, noting that it will support the continued rise in foreign exchange reserves mainly following the increasing tourism revenues, which may exceed EGP 15 billion as well as the growth of Suez Canal revenues.
Remittances from Egyptians working abroad, estimated between $26-$28 billion in the last two years, are expected to remain at their high levels.
For his part, economist Samir Raouf suggested that the increase in monetary reserve will be the largest supporter of the local currency. This comes in light of predictions for the reserve levels to continue their increase reaching $50 billion, supported by the increase in the state's foreign exchange revenues.
The dollar would continue its decline against the Egyptian pound during 2020 to reach EGP 14.75, amid expectations of an increase in tourism revenues and attractiveness of the Egyptian market compared to its counterparts in emerging markets, despite the general tendency toward cutting interest rates on Egyptian debt instruments.
The Egyptian pound achieved its best performance in 2019 after appreciating by 12 percent in 2019.
Meanwhile, the Central Bank said in a report that Egypt's domestic liquidity increased by $10 billion to register $250 billion at an increased rate of 4.2 percent in July-October of the FY 2019/2020.
The report stated that the increase in domestic liquidity was reflected in the growth of quasi-money that went up by $8 billion at a rate of 4.4 percent and the rise in the money supply by $1.8 billion at a rate of 3.2 percent.
