EGP hits fresh two-year highs
EGP hits fresh two-year high, breaking the EGP 17 / USD 1 barrier: The EGP rose to a new two-year high against the greenback on Thursday, advancing to 16.9317 from 17.0500 on Wednesday, central bank data shows. The EGP has risen 5.7% against the USD since the beginning of the year, becoming one of the world’s best-performing currencies.
The rally is being driven primarily by continued USD inflows into government debt instruments and a pickup in tourism receipts, Radwa Elswaify, head of research at Pharos, told Enterprise. Tourism revenues have grown rapidly over the past year, rising 50% to EGP 11.4 bn in 2018, while foreign holdings of government treasuries have surged since the currency float, reaching USD 14.6 bn in February, up from just USD 1.28 bn (pdf) at the start of 2017.
The EGP is bucking the trend in EM currencies: Growing fears of a prolonged US-China trade conflict have caused other emerging-market currencies to suffer an extended period of losses over the past month. The MSCI EM currency index has erased its 2019 gains and now sits at its lowest level since late-December as investors move to safe-haven assets.