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Market awaits dollar auctions to figure out trend of dollar against pound.

The banking market is awaiting the two dollar auctions decided to be offered by the Central Bank of Egypt (CBE) on Thursday and Sunday to know the trend of the dollar against the pound, especially after resignation of Hisham Ramez the CBE's governor and appointing Tarek Amer instead of him.

CBE fixed the dollar's price last Tuesday at EGP 7.9301, after raising it 20 piasters on last Thursday and Sunday. As a result, the dollar's price stabilised in banks at EGP 7.98 for buying and EGP 8.0301 for selling.

CBE is offering three auctions for selling dollar to banks on Sunday, Tuesday, and Thursday every week. Through these auctions, the dollar's price at CBE is being decided and consequently at banks and exchange firms.

"We are now awaiting the auctions CBE will offer on Thursday to sell dollar to the banks, which will be initial indication for the trend of the dollar's price in the market in the upcoming period", according to Haitham Abdel Fattah, Director General of the Treasury at the Industrial Development and Workers Bank of Egypt. "After the auction, the market is also awaiting the Sunday auction, which is decided to determine CBE's vision in regard to the future of the pound against the dollar until the end of the year".

Abdel Fattah said CBE surprised the market last July by raising the dollar's price two times in a row, 10 piasters each time. Then it fixed it for about three months in a row, adding that this scenario could be significantly repeated this time as well.

He said that increasing the dollar's price against the pound more times is definitely possible and this could happen by the beginning of the New Year, not now. That is to calm down the market and not to ignite the products' prices".

According to Abdel Fattah, there is a great tension in the official exchange market, as well as the parallel market, for not knowing the trend of the dollar against the pound definitively.

The dollar's price in the black market reached about EGP 8.60 but retreated a little after CBE fixed the price in the official market last Tuesday. The dollar's prices decreased in the annual non-deliverable forward contracts as well by about 18 piasters, recording EGP 9.86 compared to EGP 10.4 before fixing the dollar's price. The semi-annual non-deliverable forward contracts at the level of EGP 9.6, EGP 8.75 for the three months, and EGP 8.5 for the two months non-deliverable forward contracts.

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Publication:Daily News Egypt (Egypt)
Date:Oct 21, 2015
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