Surge in Foreign Exchange Earnings for Egyptian Banks: Unified Rates Drive Stability

Three exchange companies affiliated with Egypt’s three largest government banks—National Bank of Egypt, Banque Misr, and Banque du Caire—have seen a significant surge in their foreign exchange earnings, totaling around 7.2 billion pounds since the exchange rate liberalization on March 6 until the most recent Wednesday.

Abdel Majeed Mohieldin, the head of Al-Ahly Exchange Company linked with the National Bank of Egypt, disclosed that the company’s revenue from transactions involving foreign and Arab currencies, in favor of the Egyptian pound, reached 4 billion pounds by the close of business on the preceding day. He further detailed that transactions on Wednesday alone contributed approximately 200 million pounds to this figure, with the majority—65%—stemming from dollar transactions, while other currencies such as the Saudi riyal, Emirati dirham, and euro followed suit, and the remainder consisted of less commonly traded currencies in the Egyptian market.

Mohieldin emphasized a noticeable inclination among the public to shift towards using the Egyptian pound, driven by the availability of a unified and acceptable exchange rate, which in turn fosters stability in the currency exchange arena and mitigates the presence of parallel markets.

Similarly, Adel Fawzi, the head of Misr Exchange Company affiliated with Banque Misr, unveiled that revenue generated from transactions involving foreign and Arab currencies in favor of the Egyptian pound reached 2.850 billion pounds by the end of Wednesday’s operations across their 71 branches nationwide. He delineated the dominance of the dollar in these transactions, accounting for 62%, trailed by the euro at 17%, the Saudi riyal at 15%, and other currencies at smaller proportions.

Fawzi also highlighted a growing preference among the public to utilize official channels—be it banks or exchange companies—for transferring and selling foreign currencies, primarily due to the presence of a standardized exchange rate.

Moreover, Mohamed Ragai, the head of Cairo Exchange Company associated with Banque du Caire, affirmed that revenue from transactions involving foreign and Arab currencies in favor of the Egyptian pound amounted to 331 million pounds through their 12 branches across the country. Ragai echoed the sentiment that a unified exchange rate has played a pivotal role in eradicating parallel markets and bolstering transactions favoring the Egyptian pound.

Regarding currency rates, the dollar’s exchange rate stood at approximately 47.23 pounds for purchase and 47.33 pounds for sale at all three banks—National Bank of Egypt, Banque Misr, and Banque du Caire.

Additionally, during an extraordinary meeting on March 6, the Monetary Policy Committee of the Central Bank of Egypt implemented significant increases in overnight deposit and lending rates, along with adjustments to the Central Bank’s main operation rate and credit and discount rates, all aimed at reaching 27.25%, 28.25%, 27.75%, and 27.75%, respectively.