A blow to the green… A sharp decline in the price of the dollar on the black market

The price of the dollar continued to decline strongly on the black market, with the decline in demand for hard currency and direct statements by government officials that there is no new flotation of the Egyptian pound.

Black market confusion

The black market is in a state of confusion, with the dollar turning to losses during recent dealings, amid a significant increase in the volume of supply with a collective reluctance by importers to request hard currency from outside banks.

A large number of merchants linked the dollar’s losses on the black market to the Egyptian government’s moves during the last period. The beginning was announcing the implementation of two deals within the government’s offering program, indicating the government’s intention to move forward with implementing the program during the current year.

In addition, the Cabinet’s decision to exempt gold imported from abroad accompanied by expatriates from fees and customs, with the exception of value-added tax, which is calculated on workmanship only. The decision caused a significant decline in gold prices in the Egyptian market during the past few days.

The third reason is the Egyptian government’s continued release of goods, especially fodder, that were stacked in Egyptian ports. This was one of the most important reasons for importers resorting to the black market, thus increasing speculation on the dollar and its price rising to 42 pounds in last week’s transactions.

Decreased demand for the dollar

However, in recent transactions, the activity of speculators declined with the absence of demand for the dollar, which was traded in the parallel market at levels between 34 and 33 pounds, according to what dealers told “Banker”. This violent decline in exchange rates caused the majority of traders and speculators to incur heavy losses.

At the same time, the Egyptian Prime Minister, Mostafa Madbouly, sent a message of reassurance to the Egyptian people that the country is capable of bridging the dollar gap.

During a conference to clarify the decisions of the Supreme Investment Council, he revealed that the Council of Ministers discussed sustainable follow-up mechanisms for all those decisions, to ensure moving forward in their implementation.

Important statements

With regard to the investor’s profits, the Egyptian Prime Minister explained that the Egyptian state during the first months of the crisis did not witness any problem related to the transfer of the investor’s profits, and the evidence for this is that in the midst of the crisis, the state allowed the exit of $ 21 billion of what is called “hot money”, which proves The state did not place any restrictions on the entry and exit of investors’ funds.

He stressed that the Egyptian state is fully committed to facilitating the exit of investors’ profits, and said: “I would like to reassure the Egyptians that Egypt is capable of bridging the dollar gap … and today there is a very clear plan for that.”
He pointed out that the volume of investments that will be injected by local and foreign investors will contribute to reducing the inflation rate, which will be reflected positively on the level of commodity prices.

He added, “Whenever there is an increase in the volume of investments, this is followed by an increase in the amount of hard currency available, which reflects positively on the value of the Egyptian pound and contributes to its real value evaluation.”
He explained that these decisions also contribute to providing more job opportunities for young people, saying: “The state is required to provide one million new job opportunities annually,” pointing in this regard to the state’s efforts to pump more public investments to provide more job opportunities.