In November 2016, the Egyptian government announced the start of the economic reform program, which began with floating of the Egyptian pound and completely liberalizing the exchange market.
In turn, Yahya Abul-Fotouh, Vice President of the National Bank of Egypt, indicated that since the decision to liberalize the exchange rate until this April, foreign currency flows in the bank have risen to about $177 billion.
Foreign exchange in Egyptian banks
Yahya Abul-Fotouh added that the National Bank of Egypt recorded a growth in dollar because of the increase of the remittances from Egyptians working abroad, tourism and exports, and global investment fund flows in order to invest in Egypt.
In the same context, Akef al-Maghribi, Vice President of Banque Misr, said that the bank’s proceeds from foreign currency inflows since the exchange rate liberalization so far have reached about $63 billion.
Al-Maghribi added that the cash flows have achieved, since the beginning of this year, an increasing growth from several resources following the success of the economic reform program and the increase in growth rates.
Earlier, an official in the banking sector confirmed that the decision to liberalize the exchange rate succeeded in restoring the confidence of the international investment community in the Egyptian economy.
The official also expressed that this confidence was reflected in the volume of foreign cash flows to Egypt, in addition to the improvement in the classification of the Egyptian economy with international institutions, which placed Egypt on the top of the countries for investors in emerging economies.
After the floatation
The total foreign exchange inflows to banks and the banking system since the exchange rate liberalization on November 3, 2016 until now, has exceeded $ 400 billion, the official said.
He indicated that these flows included cash loans, bonds, investor inflows, tourism revenues, remittances from Egyptians working abroad, in addition to exports, but they do not include loans provided to projects.
Before the flotation decision, the black market acquired the largest share of dollar transactions, due to the large difference between the prices offered by merchants and exchange companies, and the official rates at Egyptian banks.
Last March, the net foreign exchange reserves jumped, and the total foreign exchange reserves at the Central Bank of Egypt increased to about $40.337 billion at the end of last March, compared to $40,201 billion at the end of February.
Keep reading: Egyptian Stock Exchange Suspends Trading After A 5% Drop