CAIRO, 16 January 2005 — Egypt’s prime minister was yesterday quoted as saying the Egyptian pound would strengthen on the foreign exchange market, where it has gained more than five percent against the dollar since December.
“The Egyptian pound will become stronger in the future in the foreign exchange market,” Prime Minister Ahmed Nazif was quoted as saying by the official Middle East News Agency.
He did not give a time frame. “Supply is currently more than demand for foreign currency after citizens realized that holding on to the dollar was not beneficial and sought to get rid of what they had,” he said.
Economists have attributed the pound’s strengthening to strong tourism revenues, gas exports and Suez Canal receipts. Foreign exchange dealers say clients have been selling dollars anticipating a further strengthening of the pound.
The pound closed at a weighted average of 5.90 to the dollar on Thursday, compared to a level of around 6.22 before a foreign exchange interbank market was launched on Dec. 23.
Nazif also said the reduced price of the dollar would cut the prices of imported commodities. Egypt is one of the world’s biggest importers of wheat to make bread for its population of 70 million.