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The Egyptian Central Bank reveals a surprise regarding foreign exchange reserves

The Central Bank of Egypt revealed a significant increase in interbank operations during the days following the adoption of a flexible exchange rate for the pound against the dollar and foreign currencies, about 20 times the daily average.

This comes while Egypt has witnessed foreign inflows of dollar cash of more than $925 million since January 11, which is a positive indicator in the wake of the third devaluation of the local currency in the largest Arab country in terms of population in less than 12 months, according to what the Egyptian Central Bank described in its statement. .

read more: Central Bank: Foreigners have pumped $925 million into Egypt since January 11th

The bank indicated that the increase in dollar flows allowed covering more than two billion dollars of importers’ needs in the past three days.

The currency fell by more than 16% in 2023, after the authorities pledged to allow greater flexibility in the exchange rate that was key to securing $3 billion in International Monetary Fund assistance.

It is noteworthy that the Egyptian pound recorded a record low against the dollar, amounting to 32.19 pounds / dollar last week, which led to narrowing the gap with the rate on the black market that appeared at a time when Egyptians struggled to find dollars through official channels.

And according to “Bloomberg” agency, in a report published today, Tuesday, and viewed by “Al”, that the pound is the worst performing currency in the world this year, and measures of short-term historical fluctuations show that the fluctuations are the most extreme in the world. The series of currency devaluations also affected annual inflation, which reached a five-year high in December, and added pressure on consumers in the country of more than 104 million people.

Surprisingly, the Central Bank revealed that net international reserves increased despite debt repayments of $2.5 billion in November and December combined.

He also indicated that the current reserves cover 5.4 months of imports.

He added that banks are currently marketing financial derivatives on currencies to enable institutions to hedge against fluctuations in exchange rates.

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