Egyptian economic experts expect the Egyptian pound to rebound this week from an anticipated strong performance of the stock market. The Egyptian currency, which has lost nearly 4 percent of its value against the American dollar and the single European currency since the eruption of the 25 January revolution that ousted Hosni Mubarak and his corrupt regime, is now trading at just below 6 pounds to the US dollar. The Central Bank of Egypt has said it is ready to intervene in the case of a depreciation for the pound, but has clarified it there was no need to do so, insisting that real supply and demand were governing the currency market.
The Egyptian bourse resumed trading Wednesday for the first time since 27 January with big caps loosing a combined 13 percent in two sessions before going to the weekend holidays, making for a total loss of just under 30 percent since the outbreak of the revolution while small and medium caps lost nearly 7 percent over the last two trading days for a loss of over 40 percent.
The last trading session witnessed another wave of selling by foreigners, especially institutions that pressured the Egyptian pound downwards.
Foreigners are transferring their money abroad with no caps because the Egyptian government has insisted it will not put a temporary limit on transfers out of the country while proceeding with the preservation of free market principles.
But Thursday’s session saw a strong rebound for small and medium cap stocks as Egyptian and Arab individual investors bought big stocks resulting in the expression that ‘the worst is behind as far as the Egyptian market is concerned’.
There is also a large scale initial public offering on the hand this week for a fund called ‘Egypt’s Future’ where subscriptions are expected to shatter records, and that too is expected to support the local currency along with a strong showing for stocks.
The US dollar now stands at 5.97 Egyptian pounds, the euro is trading at 8.3 pounds, the Japanese Yen at 7.3 pounds, while the British Sterling equals 9.6 pounds.