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The price of the pound will see more movements in the period … Masrawy

07:31 PM

Tuesday 22 January 2019

Books – Mohammed Al-Sabbagh:
Central Bank Governor Tariq Amer said that the recently fixed pound exchange rate is likely to witness further action in the coming period after the mechanism for guaranteeing the transfer of foreign funds has been completed.
The central bank of the mechanism would guarantee foreign investors access to foreign exchange when they have the desire to exit domestic securities, whether government bonds, treasury bills or listed equities, to encourage them to return to Egypt.
After the central bank's decision last December, foreigners wishing to buy Egyptian bonds, bonds and treasury bills had to enter and exit through the interbank market, not the central bank mechanism.
In an interview with the Bloomberg network, published on Tuesday, Amer added: "We will see a greater volatility in the currency rate after the cancellation of the transfer mechanism of foreign funds, where investors will now have to deal in the interbank market."
"But at the same time, we have reserves to help us deal with any speculation or practices that cause confusion to the market," Amer said, adding that there was work to ensure that the market was "free".
Amer also said that monetary reserves help to defend the new currency pricing system, and that the interest rate can also be used as a tool to counter that.
The remarks by the central bank governor, according to Bloomberg, appear to be directed in some way to foreign investors who scrutinize Egypt's economic policy as the country approaches the new tranche of the IMF's $ 12 billion loan over three years.
Tariq Amer said that January saw the first positive net inflow of foreign investors since last May.
"We have portfolios of more than $ 10 billion and the cash reserves have seen little decline despite external inflows, reflecting the resilience of our economy," he told Bloomberg.
Foreign exchange reserves in Egypt rose from $ 15 billion before the process floated, to a record high of more than $ 44 billion in November, followed by a $ 2 billion decline in December, partly due to the delay in the fifth installment of the IMF loan.
The governor of the Central Bank noted in his interview with Bloomberg that Egypt is expected to get the new installment of the loan at the end of January or the beginning of February at the latest.
He told the network: "We agreed on everything, we agreed with the mission on the performance of Egypt during that stage and there is agreement on our commitment to the program." When asked if there are significant obstacles, he replied "No".



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