The currency of Egypt (pound) decreased to its lowest point throughout the last five month thus causing worries that the problems in the world economy will finally cause further decrease of the country’s currency until the end of the year. With the aim to stop this situation and make the pound more stable the Central Bank of the country revised the regulations concerning the currency exchange management. However all this actions mean almost the one thing only – handling of the currency exchange with the aim of assets withdrawal from the Egyptian Stock Exchange. The regulations the Central Bank is now trying to reaffirm were first taken in December 2004. However the reaffirming of them is supposed to put a control on investors trying to withdraw from the markets.
Thus the increased withdrawal from the Egyptian markets over the last days make the officials suppose the inefficiency of the banking system to keep up with the currency conversion.
According to Reham ElDesoki a senior economist at investment bank Beltone Financial there were active operation at the forex interbank system throughout the last 2 days that helped to adjust the requests of the investors to withdraw the Egyptian Stock Exchange.
As for the forex interbank system itself it was established with the aim to set up the loan system of the country that will contribute banks to provide loans to one another.
The one of the main reasons of the system creating was that the banks possessing surplus cash might provide certain aid to those that are lack of cash. Such move was supposed to lessen the pressure that may be aimed at the exchange rate.
The exchange rate now is at the point of 5.44 in relation to the USD. And according to the analysts opinion the currency will still decrease until the end of the year. It is supposed that the pound will reach the point of 5.50 in relation to the USD until the end of 2008.