Stabilizing after the float, LE stands firm at under LE 50 against USD

Cairo – March 7, 2024: In the 24 hours after the Central Bank of Egypt's (CBE) decision to float the Egyptian pound on Wednesday, leading to a significant decline of 62 percent in value, the pound displayed resilience and stabilized at LE 49.5 against the USD in major banks at the start of Thursday trading.

Prior to the currency adjustment on Wednesday, the LE spent nearly a year at LE 30 against the USD.

Egypt’s devaluation promises to close a gap between official and black market rates, which peaked at above LE 70 to the USD in February, with CBE’s governor, Hassan Abdalla, describing the black market as a "disease" that reflected a lack of trust in the financial system in a press conference on Wednesday.

State-owned National Bank of Egypt (NBE) maintained the dollar's purchasing and selling price at LE 49.5 and a selling rate of LE 49.6, with Banque Misr recording a buying rate of LE 49.5 and a selling rate of LE 49.6, a slight decrease from Wednesday's peak numbers of LE 50 and LE 51, respectively.

The buying rate at the Commercial International Bank (CIB) settled at LE 49.5, while the selling rate dipped to LE 49.6, marking a notable decline from Wednesday's rates of LE 50.3 and LE 50.4.

ALEXBANK adjusted its rates to LE 49.4 for buying and LE 49.5 for selling, down from LE 50 and LE 50.10 on Wednesday.

The CBE’s announcement of shifting the pound to a market-driven system, in parallel with raising key interest rates by 6 percent, is in line with the conditions of a deal with the International Monetary Fund (IMF) and signals a positive shift to restore investor confidence.

In a press conference on Wednesday, Abdalla acknowledged the necessity of building trust in the financial system and reassured that the CBE retained intervention capabilities in case of "illogical movements."

The LE’s stabilization and successful negotiation of an additional $5 billion by the IMF, upping its $3 billion loan to $8 billion, emphasizes Egypt's commitment to economic reforms.

As part of the program, the country pledged to address issues such as price stabilization, debt management, and the promotion of private-sector growth.

Abdallah said that Egyptian interest rates, long amongst the highest globally, would now be on a "downward track."