A member of the Advisory Committee for Macroeconomics at the Egyptian Cabinet, Mohamed Fouad, explained on Sunday evening the reasons behind the rise in the US dollar price against the Egyptian pound in futures contracts, recording LE59.
During a telephone interview with TV host Lamis al-Hadidi on the“Last Word” (Kalema Akhera) TV show, on “ON” channel, Fouad said that the reason for the increase is the rise in inflation in the US, which reduces the possibility of reducing interest rates and thus increases the attractiveness of the US dollar.
The US dollar rose by 4.5 percent since September 16, while the US currency has risen by 5.5 percent against the euro in that same period.
Fouad explained that the policies being followed globally currently make the dollar strong, and Egypt is following a flexible exchange rate policy which is therefore translated into changes in the price against the pound.
There are several factors that shape the US dollar price, including dollar flows, state obligations, and foreign exchange policy, he added.
Regarding the upcoming meeting of the Central Bank of Egypt‘s Financial Policy Committee and whether it will witness any reduction in interest rates, Fouad noted that the Central Bank is in a position that may be the most difficult choice.
He explained that there are opinion polls indicating that more than 57 percent believe that next Thursday’s meeting will witness a reduction in interest rates, but he ruled this out.
Up until two weeks ago, he said, it was possible reduce interest rates by between 1.5 to 2.5 percent, but new factors have begun to move, such as the rise in the bond market, which raises expectations that there will not be a significant reduction in the coming period.
