EGP surges to new three-year highs against the greenback
CURRENCY WATCH- EGP surges to new three-year highs against the greenback: The EGP rallied yesterday to its highest value against the USD since it was floated three years ago as part of the country’s IMF-backed economic reform program, Reuters reports. The greenback was changing hands at EGP 15.67 yesterday.
The last time the EGP was this strong was 17 November 2016, when it traded at EGP 15.61 to the greenback two weeks after the government floated the currency ahead of signing the USD 12 bn loan agreement with the IMF.
Portfolio inflows are driving the rally: The appreciation in the EGP was driven mainly by inflows from Gulf investors purchasing EGP t-bills, the newswire says, citing an unnamed Cairo-based banker. The Central Bank of Egypt (CBE) auctioned T-bills worth EGP 20.5 bn on Thursday, and another batch worth EGP 14.5 bn on Sunday, according to official data. The CBE also sold USD 984.8 mn in one-year USD-denominated t-bills yesterday at an average yield of 3.491%, down from 3.540% in an auction in January.
Stable inflows from tourism and remittances are also fueling gains, the source noted. Tourism receipts rose to USD 4.19 bn in 1Q FY2019-2020 from USD 3.93 bn a year before, and remittances climbed to USD 6.71 bn, from USD 5.91 bn.