Egyptian remittances increased after “floating the pound”

Officials and bankers said on Wednesday that remittances from Egyptians working abroad to the banking sector have risen since the country conducted a sharp devaluation of the currency last week.

On March 6, Egypt lowered the exchange rate to about 50 pounds to the dollar from the level of 31 pounds, near which it had stabilized for nearly a year.

The pound has gradually risen since the decision and is trading at 48.40 on Wednesday.

Four bankers told Reuters that remittances rose in the week following the devaluation.

Bankers and economists explained that Egyptians abroad were keeping their money or sending it outside the banking system to the parallel market, when the value of the currency fell last month to 70 pounds to the dollar.

Prime Minister Mostafa Madbouly also stated that remittances are increasing, without providing data.

The devaluation of the currency comes as part of a financial support agreement worth $3 billion that Egypt signed last week with the International Monetary Fund.

Remittances decreased in the third quarter of 2023, which is the latest data issued by the Central Bank, to $4.52 billion, down from $6.44 billion in the previous year. It had reached $8.15 billion in the third quarter of 2021, months before the war in Ukraine that deepened the currency crisis in Egypt.

One prominent banker said he had not seen any data on total transfers since the devaluation.

He added, “But the flows in general are very good,” according to what Reuters reported.

The chronic shortage of foreign currency led to the accumulation of goods in Egyptian ports.

Madbouly said that customs released goods worth $3 billion from the ports during the past few days.

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