11:09 AM
Wednesday, March 6, 2024
Written by: Sherine Salah:
Reactions to the floating of the pound and its impact on commodity prices varied between expectations that commodity prices would rise or that prices would remain without an increase, especially with the collapse of black market prices for the dollar.
Economic analysts believe that the rise in the exchange rate in banks coincides with the collapse of the exchange rate on the black market, which had reached 70 pounds to the dollar, and even with the rise in official dollar prices to about 40 pounds to the dollar, this means that the price approved for pricing goods has become lower than what is currently available. in the markets.
This means that it is expected that commodity prices will not rise in the markets in the coming days, even despite the rise in official dollar prices, according to analysts.
However, Ahmed Shiha, a member of the Importers Division of the General Federation of Chambers of Commerce, expected that commodity prices would rise in the coming period, especially after the increase in the price of the dollar in the official market.
Shiha said, in a statement to Masrawy, that he also expects the price of the dollar to increase in the parallel market after its increase in banks. But analysts believe that the black market will disappear if banks are able to meet the demand for dollars.
This morning, the Central Bank of Egypt decided to raise the interest rate by 6% at once on deposits and lending. The central interest rate rose after the increase to 27.25% for deposits and 28.25% for lending, allowing the pound’s exchange rate to be determined according to market mechanisms.
The price of the dollar rose to above 45 pounds in banks after the Central Bank’s decisions.
The bank affirmed its commitment to maintaining price stability in the medium term, and shifting towards a flexible framework for targeting inflation, by continuing to target inflation as the nominal basis of monetary policy while allowing the exchange rate to be determined according to market mechanisms.
The bank stressed that unifying the exchange rate is a very important measure, as it contributes to eliminating the accumulation of demand for foreign exchange, following the closing of the gap between the official and parallel market exchange rates.
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