Pound shielded from Covid-19

SectorFinancial Markets

A number of investment banks expect the Egyptian pound will not depreciate against foreign currencies on the back of the slowed growth of Egypt’s foreign currency earners like tourism, the Suez Canal, and exports owing to the Covid-19. “The dollar will continue to hover around its current rate of LE15.7,” said Alia Mamdouh, a senior economist with Beltone, an investment bank. Although dollar revenues from tourism and exports will remain weak throughout the year, there will be no added pressure on the pound due to a slowdown in imports, she added. Mamdouh also expects remittances from expatriates working abroad to see an increase. Even if more Egyptian workers are laid off from their jobs in the Gulf, their end-of-service earnings will result in a rise in remittances, she stated. Preliminary data shows remittances increased in September at an annual rate of 16 per cent to record $2.7 billion, up from $2.3 billion in September 2019. Remittances increased annually by 11.6 per cent to register $22.1 billion between January and September 2020, up from $19.8 billion during the same period in 2019. A Beltone report released early in December expected the pound to record an average exchange rate of ...read more...