Egyptian Banks Show Slight Variations in USD Exchange Rates; BOJ Considers Policy Shift Amid Japanese Investors’ Foreign Bond Purchases

On March 17, 2024, Egypt’s banking sector saw minor discrepancies in USD exchange rates. The Central Bank of Egypt (CBE) disclosed rates of 47.77/47.90 EGP for buying and selling.

Meanwhile, the National Bank of Egypt and Banque Misr presented rates of 47.80/47.90 EGP. The Commercial International Bank (CIB) opted for a slightly lower rate at 47.75/47.80 EGP, while QNB ALAHLI offered rates at 47.75/47.85 EGP.

Faisal Islamic Bank quoted rates of 47.70/47.80 EGP, while Abu Dhabi Islamic Bank reported the highest rates at 48.52/48.62 EGP, illustrating the dynamic nature of Egypt’s currency market.

Amid speculation about a potential policy shift by the Bank of Japan (BOJ), Japanese investors continued to purchase foreign bonds, amounting to ¥3.5 trillion in the first two months of this year.

The BOJ board is scheduled to discuss the prospect of ending negative interest rates at a meeting concluding on March 19, with a 67 per cent probability of such a decision implied by overnight-indexed swaps.

Survey data indicates that by the year’s end, 73 per cent of respondents anticipate the BOJ raising the short-term interest rate to a range between 0.01 and 0.5 per cent.

Even if the policy rate reaches 0.5 per cent by the end of 2024, it would remain considerably lower than the US rate, potentially exerting downward pressure on the Japanese yen.

Over the past year, the yen has depreciated by approximately 10 per cent against the dollar, with forecasts suggesting it may trade between 120 and 140 per dollar by year-end. Currency analysts foresee a limited yen rally.



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