Egyptian Pound One of Best Emerging Currencies Against US Dollar

Business

August 25th, 10:14am

Cairo- Asharq Al-Awsat

The Egyptian pound responds to the recovery of Egypt’s foreign exchange revenues (Reuters)

The Egyptian pound (EGP) is one of the best-emerging market currencies against the US dollar, a report by the cabinet’s media center has indicated. According to the report, the pound’s value is driven by the improvement of foreign exchange sources, pushing forward its strong performance in 2019 before the coronavirus crisis. Over the past few years, the implemented structural and economic reforms have given the EGP a degree of flexibility and resistance to be able to face shocks, adapt to crises, and recover from their negative effects, the report explained. The reforms had a positive impact on international institutions’ forecast of the EGP’s performance against the dollar and its ability to improve, following the recovery in the country’s foreign exchange revenues. The Economist magazine has announced an expected improvement in the EGP’s performance against the dollar in the next five years, the report read, in comparison to pre-coronavirus levels, in which the dollar exchange rate reached EGP16.82. The local currency’s performance is expected to improve by 4.5 percent, bringing the US dollar to EGP16.06 in 2020, and 4.3 percent to amount to EGP16.10 in 2021. It is also expected to improve by 5.1 percent to reach EGP15.97 in 2022, 5.8 percent to EGP15.85 in 2023, before reaching 6.4 percent to EGP15.74 in 2024. The magazine praised the stability of net international reserves in June, affirming that it led to an improvement in the EGP performance against the dollar. It further expected the tourism, export, and service sectors to begin to recover gradually after 2021, indicating that confidence in the availability of hard currency will contribute to attracting foreign investors, especially by early 2022. The report highlighted Fitch Ratings’ indication that the EGP is among the best performing emerging market currencies until August. The agency said the pound has been stable against the dollar and is expected to remain relatively stable until the end of 2020 despite the sharp decline in emerging market currencies.

from Asharq AL-awsat https://english.aawsat.com/home/article/2468441/egyptian-pound-one-best-emerging-currencies-against-us-dollar