Egyptian pound appreciates to highest in over two years

A man counts Egyptian pounds outside a bank in Cairo, Egypt October 24, 2016. (Reuters)
Updated 17 March 2019
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Egyptian pound appreciates to highest in over two years

  • The currency was trading at 17.34 to the dollar on Sunday, up more than three percent from 17.86 on Jan. 22 when it began its latest round of strengthening
  • “You’re seeing most of the indicators improving,” said Hany Farahat, senior economist at Egyptian investment bank CI Capital

CAIRO: The Egyptian pound strengthened on Sunday to its highest in over two years, boosted by an increase in foreign funds into the country.
The currency was trading at 17.34 to the dollar on Sunday, up more than three percent from 17.86 on Jan. 22 when it began its latest round of strengthening.
“You’re seeing most of the indicators improving,” said Hany Farahat, senior economist at Egyptian investment bank CI Capital. “Tourism, exports, substitution of natural gas imports with domestic production, remittances are at a peak, FDI is improving slightly.”
He also said the higher inflows were due in large part to Egypt scrapping a mechanism that guaranteed foreign currency for investors exiting the government securities market.
“Once the repatriation mechanism was abolished, it meant that every single inflow coming into the country reflects directly on interbank liquidity,” he said. “This, in tandem, should also reflect directly on EGP volatility against the dollar.”
“I think it has come a bit late. If the repatriation mechanism had been removed a year ago, this appreciation would have happened a year ago,” he said.
Since the central bank devalued the currency by about half in 2016, economists say it has closely controlled the value of the pound, which was last this strong in March 2017.
Allen Sandeep, head of research at Naeem Brokerage, said the higher inflows were also due to increased carry trade appetite for Egyptian treasury securities and improving balance of payments.
“We have now restarted LNG exports,” Sandeep said. “On an annual basis, assuming that we export 1 billion cubic feet (bcf) of gas every day, that adds more than $2 billion in exports per year.”
Egypt, which now exports 1.1 bcf of natural gas per day, became a net exporter in late 2018, a significant turnaround for a country that spent about $3 billion on annual LNG imports as recently as 2016.


Lebanon’s Jammal Trust Bank forced to close by US sanctions

Updated 19 September 2019

Lebanon’s Jammal Trust Bank forced to close by US sanctions

  • Jammal Trust Bank is accused of helping to fund the Hezbollah movement in Lebanon
  • The bank has 25 branches in Lebanon and representative offices in Nigeria, the Ivory Coast and Britain

BEIRUT: Lebanon’s Jammal Trust Bank has been forced to wind itself down after being hit last month by US sanctions for allegedly helping to fund the Iran-backed Hezbollah movement, the bank said on Thursday.
The central bank said the value of the bank’s assets, and its share of the national deposit guarantee body, were “in principle enough to pay all deposits and commitments.”
Jammal Trust Bank denied the US allegations in August after the bank and its subsidiaries were hit with sanctions, accused of helping to fund the Hezbollah movement in Lebanon.
“Despite its sound financial situation ... and its full compliance with banking regulations, the (bank) was forced to take the decision to liquidate itself in full coordination with the central bank,” Jammal Trust said in a statement.
The bank has 25 branches in Lebanon and representative offices in Nigeria, the Ivory Coast and Britain, its website says.
It is a relatively small lender, with net assets of 1,600 billion Lebanese pounds ($1 billion) at the end of 2017, according to the annual report on the latest year for which data is available.
Washington has sought to choke off Hezbollah’s funding worldwide, with sanctions among a slew of steps against Tehran since US President Donald Trump withdrew last year from a 2015 international nuclear deal with Iran.