Dollar rises to EGP 56.35 as nearly $700 million exits Egypt

The dollar continued to rise against the Egyptian pound on Monday for a third consecutive day, reaching a new record high of 56.35 pounds, as foreign investors recorded net sales of 38.6 billion pounds ($685 million) in stocks and treasury bills and bonds.

The pound has faced mounting pressure in October amid investor concerns that the conflict between Iran and the United States could escalate and spread across the region. The concerns intensified after President El-Sisi called on parliament to authorize him to deploy military forces to defend Saudi Arabia, a move lawmakers approved on Monday.

The dollar has risen by about four pounds since the start of October, from 52.39 pounds at the beginning of the month.

The Egyptian Exchange extended its losses for a third consecutive session on Monday, with its benchmark EGX30 index falling 1.6% amid continued foreign investor selling.

The dollar’s recent gains have also pushed up domestic prices. Traders told Al Manassa in a previous report that the stronger US currency had driven up prices for several food commodities and production inputs. Ezz Steel also announced a 1,200-pound increase in the price of a ton of steel, citing higher exchange-rate-related costs.

Despite the financial market turmoil, the private placement of shares in Banque du Caire was successful. The bank disclosed to the Egyptian Exchange on Monday that the private offering had been oversubscribed six times. Subscription requests for the public offering will continue to be accepted through Oct. 28.

The Banque du Caire offering is one of the most prominent deals under the government’s privatization program, through which the state seeks to fulfill commitments to the International Monetary Fund to reduce its role in economic activity and make more room for the private sector. Proceeds from the sale of the bank’s shares are expected to reach 36.4 billion pounds (around $650 million).