What is the secret of the Central Bank of Egypt’s recent decisions regarding the dollar and the truth about foreign currency balances in Egyptian banks? Is there really enough dollars in the banking market and why does its price increase as long as the dollar is available in the market? Stay with us until the end and you will know the details in the next report.
In the world of economics in general, numbers do not lie and indicate what is happening in the market because there is nothing hidden in the economy and what is followed by international and local institutions, and the language of numbers and economic decisions confirms a very clear fact, which is that there is no dollar crisis in Egypt and the dollar shortage remains a memory of the past, and on the contrary, the numbers and decisions say that there is A large collection of foreign exchange led the Central Bank of Egypt to take bold decisions that it could not have taken at the time of the crisis that began in early 2022.
The first of these numbers is the steady increase in the value of the cash reserve, which is approaching the $47 billion barrier. The continuous increases in the reserve say that there is a surplus of dollars. The state is transferring it to the cash reserve. Reason and logic say that as long as the reserve increases, there will be an additional dollar in the country. Otherwise, it makes no sense at all for the central bank to supply the reserve. At a time when the country is suffering from a scarcity of American currency.
The second reason or evidence for the availability of green currency in banks is that the Central Bank was able to easily provide the dues of foreign companies and was able to pay more than 3 billion dollars in payments to international companies operating in Egypt, especially oil exploration companies. These are numbers published in official statements, and it is not reasonable for the state to pay off debts of this size. For foreign companies at a time when they are having a currency crisis, not only the international companies that have taken their dues, the Central Bank is also able to pay the installments of the foreign debts due, meaning debt service or interest, without a crisis occurring in the exchange market. In numbers, Egypt has paid more than 16 billion dollars, and the size of Egypt’s external debt has declined. To $152.9 billion by the end of June 2024, compared to $168.034 billion by the end of December 2023.
This means that the position of the dollar in the banks is very strong and all of this money was paid off without any crisis or disturbance occurring in the exchange market.
Also, the state was able to meet the import needs of the country’s strategic goods, and no commodity has disappeared from the market, and as we know, the import bill is still as huge as it is, ranging between 80 and 100 billion dollars, up and down, and this is a very large number.
Among the decisions that revealed that the Central Bank of Egypt has a respectable reserve of the dollar is the decision to direct the Egyptian banks operating in Egypt to provide the dollar to resume the import of the 13 provocative goods for which an import ban was issued, including cars. The Central Bank would not have taken this decision if it had not been for the fact that it has huge dollar revenues. And in safety, otherwise he would not have to take this decision and burden the state, especially since these are non-essential goods.
The bottom line is that all the numbers say that Egypt has an increasing dollar that is able to meet all demands on the dollar and foreign currencies, and there is no importer. The bank started asking for dollars and the bank said there are none. As for the rise in dollar prices in the recent period, it is very normal because the currency price in Egypt is now a flexible price and governed by supply and demand and so on. We said that the price of the dollar has been ranging for many months between 47 and 49 pounds, and this is its fair price, as stated by the great banker Mohamed Al-Atrabi, head of the Egyptian Banks Union and head of the National Bank of Egypt. This means that this is a natural phenomenon that occurs in the exchange market, and instead of there being an increase in demand for the dollar, at the same time it indicates that the banks are able Provided evidence of the disappearance of the black market for currency.
