Why is the Dollar rising against the Egyptian pound - 2015


    Why is the Dollar rising against the Egyptian pound - 2015

  • 1 The Egyptian pound is overvalued

    The Egyptian Government had a policy of keeping the Egyptian pound stable against the Dollar. This resulted in overvaluing the currency.

  • 2 Foreign reserves aren't in a good position

    As Egypt was exhausted by the political instability it had been through starting from 2011 its foreign reserves went down greatly. This prevented the government from backing the Egyptian pound the way it did before the crisis. 

  • 3 Low Tourism income

    After the 25th of Jan revolution Egypt started getting less tourists. As tourism was one of the main sources of Foreign currencies dollars became rare and so rose in price. See why the Egyptian revolution happened.

  • 4 Low Foreign direct investment

    The political instability Egypt had been through during that phase scared investors and reduced the amount of foreign direct investment. See Why do we hate uncertainty

  • 5 Poor management of foreign reserves

    Right after the 25th revolution the Egyptian government did it's best to keep the exchange rates stable. This resulted in Eroding a big part of the foreign reserves. 

  • 6 Short supply of dollars

    As a result of the reduction in most of the dollar income sources the supply of Dollars in Egypt became and as a result the Price went up. See also why many people support Abd el Fattah el Sisi.

  • 7 The Government decided to weaken the pound

    The Egyptian Government decided to weaken the pound to push the economy and save the drying reserves. 

  • 8 The Dollar was gaining strength

    During the same phase the Dollar was mostly rising against many currencies including the Euro. This led to further appreciation of the dollar. See why the Egyptian stock market dropped in 2015.

  • 9 The oil crisis in gulf countries

    Some people believe the oil crisis in gulf countries affected the level of support Egypt is getting from gulf countries. As those countries tried to control their spending the gave Egypt less financial support. See why Oil prices fell in 2015.

  • 10 No clear Economic outlook

    While some positive reports where generated about the Egyptian economy many people were still concerned about the negative factors. This pushed the price of the Egyptian pound lower.

  • 11 The fair value was announced by different entities

    Many Entities tried to give a fair value of the Dollar compared to the Egyptian pound in 2015. The estimates ranged from 9.4 pounds per dollar up to 15 pounds per dollar. Those estimates affected the prices of the Pound in a bad way.