Egyptian pound records its highest value against dollar since October 2016

CAIRO – 10 March 2021: The Egyptian pound has recorded its highest value against the US dollar since October 2016, the Egyptian Minister of Planning and Economic Development Hala el-Said stated Wednesday.

El-Said explained - during the weekly cabinet meeting, that the exchange rate has witnessed a continuous decline since June 2020, to record LE 15.7 in November, to stabilize until February 2021, which represents the highest value of the pound against the dollar since October 2016.

She indicated that net foreign reserves continued to rise for the eighth month in a row, to reach $40.2 billion during last February, noting that the volume of remittances from Egyptians from abroad increased during the first quarter of the fiscal year 2020/2021, to record its highest level over the past two years.

In June, the IMF approved a 12-month Stand-by Arrangement (SBA) loan to Egypt, with total access of about $5.2 billion to address balance of payments financing needs arising from the COVID-19.

Since March 2020, CBE has announced using foreign reserves money to cover the Egyptian market's needs of foreign exchange, the drop in foreign investments and international portfolios due to the precautionary measures taken to confront coronavirus.

The current average of foreign reserves covers about 8 months of Egypt's commodity imports, which is higher than the global average of about three months of commodity imports.

Foreign currencies in Egypt’s foreign reserves include the U.S. dollar, euro, Australian dollar, Japanese yen and Chinese yuan.

The main function of the foreign exchange reserve, including its gold and various international currencies, is to provide commodities, repay the installments on interest rates of external debt, and to cope with economic crises.

On June 2020, the International Monetary Fund approved a Staff-Level agreement with Egypt on a 12-Month $5.2 Billion Stand-By loan arrangement.

The $5.2 billion loan came after the IMF’s executive board approved $2.77 billion in emergency financing on May 11 to help Egypt grapple with the new coronavirus pandemic that has brought tourism to a standstill and triggered major capital flight.