Egypt received over $925 million in foreign-exchange inflows since 11 January 2023 when the pound plunged by 16% to an all-time low of 32.1 narrowing its gap with the rate on a black market that emerged as the country grappled to secure dollars through official channels.
Central Bank of Egypt (CBE) said in a statement on Monday that additional foreign currency from local sources, remittances from Egyptians working abroad and tourism also flowed into the market over the past three business days.
Egyptian authorities vowed to shift to a “durably flexible” exchange rate when it reached an agreement with the International Monetary Fund for a financial support package last October. The country has devalued its currency three times since March 2022 as part of a broader strategy to bolster an economy that was significantly impacted by the war in Ukraine.
Meantime, Fitch Ratings said that Egyptian banks’ regulatory capital ratios can withstand further currency depreciation as they are supported by healthy internal capital generation.
The rating agency cautioned that the Egyptian pound may remain under pressure in 2023 given the country’s import backlog and large gross external funding needs, which are estimated at $5.4 billion and over $19 billion, respectively.
