Egypt Aims to Ease Pressure on Forex Reserves via $1 Billion Treasury Bill Auction

Barely a period aft raising $850 cardinal from an auction of dollar-denominated treasury bills, the CBE was reportedly poised to rise $1 cardinal via akin instruments. The determination to hike overnight involvement is said to beryllium portion of the cardinal bank’s ongoing efforts to stabilize Egypt’s teetering economy.

Easing Pressure connected the Egyptian Pound

On Feb. 5, the Central Bank of Egypt (CBE) was poised to auction dollar-denominated treasury bills (TB) worthy $1 billion. This determination is said to beryllium portion of the CBE’s ongoing efforts to stabilize Egypt’s teetering economy. The TB auction reportedly aims to alleviate the unit connected the country’s overseas speech reserves.

Before this latest auction, the CBE had already sold much one-year TBs worthy $850 cardinal successful December 2023. Despite these measures, the Egyptian lb continues to look challenges.

Just days earlier the TB auction, the CBE raised overnight involvement rates by 200 ground points. As a result, the lending complaint surged to 22.25%, portion the deposit complaint reached 21.25%. Interest rates were hiked to curb ostentation and stabilize the economy. The diminution successful Egypt’s header ostentation complaint to 33.7% indicates immoderate occurrence successful the CBE’s efforts, a study successful the Middle East Economy said.

As reported by Xhinua, the pound’s parallel marketplace speech complaint versus the greenback concisely touched a grounds debased of EGP75 for each dollar. The currency’s authoritative speech complaint versus the dollar has remained astatine EGP31:USD1.

Meanwhile, the reports connected the backing statement betwixt Egypt and the International Monetary Fund (IMF) are believed to person spurred the pound’s resurgence successful aboriginal February. For instance, a Feb. 5 Alarabiya News study attributes the pound’s astir 40% summation versus the dollar to claims that Egypt and the IMF person agreed to grow the scope of the former’s programme from $3 cardinal to $10 billion.

#EgyptWatch: NO MONEY SUPPLY CONTROL = NO INFLATION CONTROL.

The Central Bank of Egypt confirmed the wealth proviso (M2) grew 19.92% successful 2023. That's mode supra Hanke's Golden Growth Rate of 7.3-11.3%, a complaint accordant with hitting Egypt’s 5%/yr – 9%/yr ostentation target.

No…

— Steve Hanke (@steve_hanke) February 4, 2024

Despite the anticipation brought by the quality of the country’s statement with the IMF, critics of the Egyptian authorities similar Steve Hanke, a prof astatine the Johns Hopkins University, judge the state is not yet connected the mend. To enactment this constituent of view, Hanke, successful 1 of his posts connected X, cites Egypt’s ostentation complaint which helium placed astatine 139%. In different posts, Hanke besides points to Egypt’s precocious indebtedness arsenic 1 of the reasons helium is little sanguine astir the country’s prospects.

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