Egyptian authorities are happy with financial market movements since they floated the pound, and inflows of foreign exchange into the banking system are surging, deputy finance minister Ahmed Kouchouk was quoted by Reuters on Wednesday.
The Egyptian pound fell to near 18 to the U.S. dollar after its peg of 8.8 was scrapped on Nov. 3 in an effort to lure more foreign investment and shut a black market in dollars. In the last few days it has become more stable at around 15.50.
Kouchouk, speaking to a small group of foreign reporters at a financial conference in Dubai, said volatility was natural after a currency float and the pound’s moves were “not a surprise or concern”.
“Banks are competing, we are seeing that rates are fluctuating, each bank has its own buying and selling rate – all the ingredients of a flexible, efficient system are there now,” said Kouchouk, an architect of Egypt’s economic reform plan.
He described the central bank as “very happy with what’s happening.”
Data from the central bank shows Egypt’s banking system has received about $1.5 billion in net hard currency inflows since the float, around 10 to 15 times the level of weekly inflows before the pound was freed, Kouchouk said.
He called that number encouraging and predicted inflows would increase further.
