The Egyptian Pound (EGP) went through some volatility since it was floated in November 2016 until today This could be broken down in 4 main phases as follows Phase 1 From floatation till June 2018 Phase 2 From June 2018 December 2018 Phase 3 From January 2019 February 2020 Phase 4 Coronavirus worldwide outbreak Required Analyze what happened during each of the above 4 phases and explain in full details how these factors impacted the EGP exchange rate versus the Dollar What made the EGP appreciate depreciate Your analysis should be based on how the BOP components impacted the exchange rate What actions (if any) were taken by the Central Bank of Egypt in response to these market changes What was the intended outcome which made CBE take such actions What major actions related to interest rates on EGP saving instruments were taken by the largest public sector banks (National Bank of Egypt and Banque Misr) Why do you think these actions were taken What do you think will happen to the EGP exchange rate against the Dollar by end of 2020 (EGP will appreciate Depreciate or remain the same at the current level of US$ EGP 15 7) Justify your expectation based on the BOP components analysis

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Posted on Sep 16, 2024

The Egyptian Pound (EGP) went through some volatility since it was floated in November 2016 until today. This could be broken down in 4 main

The Egyptian Pound (EGP) went through some volatility since it was floated in November 2016 until today. This could be broken down in 4 main phases as follows:

Phase 1: From floatation till June 2018

Phase 2: From June 2018 December 2018

Phase 3: From January 2019 February 2020

Phase 4: Coronavirus worldwide outbreak

Required:

Analyze what happened during each of the above 4 phases and explain in full details how these factors impacted the EGP exchange rate versus the Dollar.

What made the EGP appreciate / depreciate. Your analysis should be based on how the BOP components impacted the exchange rate.
What actions (if any) were taken by the Central Bank of Egypt in response to these market changes. What was the intended outcome which made CBE take such actions?
What major actions related to interest rates on EGP saving instruments were taken by the largest public sector banks (National Bank of Egypt and Banque Misr). Why do you think these actions were taken?

What do you think will happen to the EGP exchange rate against the Dollar by end of 2020? (EGP will appreciate / Depreciate or remain the same at the current level of US$ / EGP 15.7). Justify your expectation based on the BOP components analysis.