The Egyptian stock market index rose by market value on Monday to 31 billion pounds, a difference from the capital when the stock exchange closed on Sunday, while Egyptian officials attributed the stock’s gains to the rise in the exchange rate today to the central bank on loans and deposits in Egyptian pounds. The interest rate decision had an effect.
At the close of the Egyptian Stock Exchange on Monday, the main index of small companies EGX100 rose 3.53%, and the EGX30 index of large companies rose 4.9%.
Mohamed Maher, Vice President of the Egyptian Securities Association, said that the increase in the market value of the Egyptian Stock Exchange on Monday was due to the Central Bank’s decision to increase deposits and loans in sterling pounds by 1%,
which allows parallel movements in the exchange rate and becomes flexible in this case, other than what Previously, where there are similar parallel market transactions, the dollar has two prices, one official and one informal,
But the central bank’s decision settled the matter, making the market one that can flexibly adjust to supply and demand.
Today’s central bank decision to increase the exchange rate against the US dollar by more than 14% prompted domestic and foreign investors to return to the stock market again and buy shares extensively. Egyptian pound, which led to a sharp rise in the stock.
He pointed out that the central determination and the adjustment of the exchange rate has the advantage of allowing direct and indirect investment flow, as happened in the stock exchange, and it can also allow investors to withdraw from the Egyptian market in the last period, as they believe.
The exchange rate is unfair, and the volume of Egypt’s foreign exchange reserves has been seriously affected, but this decision will correct the situation.
I add that any economic reform process has taxes and one of the negative effects of the recent central bank decision is that it will increase the foreign currency price of goods imported from abroad, which will then be reflected on the inflation scale and in the figure.
From the rise in domestic prices, but the government is trying several measures to reduce the harm to citizens through wage increases and social protection programs.
The Vice Chairman of the Egyptian Securities Association expected that the exchange rate will witness greater fluctuations in the coming period based on the flexibility currently available based on supply and demand.