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Effect Rising Dollar Rate on The Egyptian Market

JP Morgan, one of the world’s largest banks, issued a report at the beginning of March in which it said that the exchange rate of the Egyptian pound was unfair and the Egyptian pound rate should be reduced from 5% to 20%. Despite many objections, the Egyptian people were surprised on March 21 by the news of the increase in the dollar rate.

With the repercussions of the Russian-Ukrainian war and the ban on importing many food and industrial items from Russia, the prices of most goods and products have risen in the Egyptian and global markets. Because the Central Bank links the value of the Egyptian pound to the dollar, and the dollar rate has risen after All of these events have left the Central Bank of Egypt with no choice but to announce the devaluation of the Egyptian pound or the so-called “Egyptian pound float”.

Since then, everyone has been wondering what the impact of the increase in the dollar rate is? What are the expectations of the dollar rate, whether it increases or decreases? How does it affect the capital market and real estate investment? So many questions arise in the minds of entrepreneurs, businesses, and even the average citizen, which we will try to answer during this article. 

The impact of the dollar rate rise on the Egyptian capital market

Due to the lack of products and increased demand for them. Here, the state tries to reduce demand by reducing the money citizens have by attracting them to deposit them in banks. At the same time, the state will have funds that enable it to provide strategic products and materials to citizens, so banks have Egyptian raised the interest rate to 18%.
Since the Central Bank floated the Egyptian pound after the increase in the dollar rate and no actual mechanism has been established to calculate the costs of import price, selling prices, and net profit, this has led to a rise in the value of materials and continues to increase so that the result will be unreal prices, lower stock and lower financial liquidity. It will lead sequentially to a recession, economic recession, and high inflation rates.
Here, I believe that the only solution is to free launch the dollar rate, provide many services and discounts and adjust laws to protect society and preserve the poor and middle class in the country. In addition, the state must implement many economic decisions and reforms, which, if implemented strictly, will attract for foreign investments and return the Egyptian market recovery. 

Dollar rate forecast 2022

Due to the significant strikes and volatility witnessed in the Egyptian capital market. Unfortunately, many experts confirmed that the dollar rate would continue to rise, and there are confirmed expectations that the dollar rate will reach 20 pounds in the next two months.

What is the impact of the dollar rate rise on Egyptian business sectors?

Of course, the devaluation of the Egyptian pound against a significant increase in the dollar rate has affected the Egyptian citizen and all sectors of all kinds, whether manufacturing, professional services, health and productivity sectors, real estate asset management sector, import sector, and others. 

توقعات سعر الدولار 2022 | ECPA

How will the increase in the dollar rate affect the prices of Egyptian stock exchange shares?

The devaluation of the Egyptian pound against the increase in the dollar price will be a source of attraction for more investment in the Egyptian market than non-Egyptian investors, which means that the prices of Egyptian stock exchange shares will decrease, which is an attractive offer for foreign investors. In addition, the depreciation of the shares of companies for domestic production will be A source of attraction due to the high population, such as shares of therapeutic companies and medicines. The rise in the dollar price also greatly benefits Egyptian companies that export their products, as they will become more competitive in foreign markets due to their lower prices.

How do rising dollar prices affect real estate investment?

The unprecedented rise in the dollar rate and the subsequent increase in interest rates in banks have led to a massive increase in real estate prices to 30%, making real estate investment in Egypt suffer from a recession in the coming days, whether in sales or purchases. As a tip, if you now have an appropriate opportunity or discounts agreed upon before the dollar price rises, you should complete the purchase quickly. Real estate investment is one of the most important ways to save safe and profitable.

How is your company facing a higher dollar rate?

The sudden fluctuations in the dollar and Egyptian pound have caused concern in every Egyptian's chest, but nothing concerns entrepreneurs. What is the best option to invest money and companies to buy shares? How do I face taxes?

Here comes the role of an accounting ECPA office. One of the most prominent accounting offices in Egypt and the Arab world. We have a vast team of financial experts, consultants, and certified accountants. We provide accounting and tax services to all sectors.

كيف تواجه شركتك ارتفاع سعر الدولار؟ | ECPA
ماذا سنقدم للراغبين في الاستثمار؟ | ECPA

What will we provide to those interested in investing?

For anyone wishing to invest their money by buying stocks, we can provide a lot of services such as:

  • Evaluate companies and their accounting systems.
  • Conducting economic feasibility studies on different types of companies.
  • Help you identify the best shares of companies on the market.
  • Extract all types of licenses available to practice your company's activity.
  • Provide a thorough study based on thoughtful financial analysis.
  • Exploiting critical corporate performance indicators.
  • We are dealing with all steps to establish companies in Egypt. 

What will we offer business owners?

In light of the rise in the dollar, your company will have complex tests to achieve success and stability that makes your profits guaranteed at the highest possible value, but this will not happen in two significant currencies: auditing and auditing, on the one hand, tax planning on the other.

Thanks to God. Our office provides all tax and audit services that provide your company with the lowest taxes and more profits. Our services include:

- Conduct external auditor and evaluate the internal audit system.

- Review the financial budget, financial statements, and all accounts with utmost accuracy.

- Detect any embezzlement or theft.

- Successful financial management of all the company's business.

- An external auditor from us helps you familiarize yourself with your company's financial and accounting aspects.

- Discover, develop and address your company's strengths, weaknesses.

- Submit periodic, annual, quarterly, and semi-annual reports.

- Provide thoughtful and proven recommendations that help you improve business performance within your company.

Follow up work and conduct periodic visits.

- Consultations and technical support are available around the clock.

- Tax planning that achieves rationalization of the tax value you will pay and law standards.

- Preparing electronic tax reports and returns and ensuring that all tax savings are exploited.

- File appeals against the tax form and tax value with the attendance of all appeal or dispute resolution committees.

- Estimating VAT on the sale of fixed assets.

- Estimating the value of taxes on income, salaries, and tax obligations.

- Complete all accounting and accounting operations using the latest electronic and digital tools.

- Preparing an electronic invoice.

Our ECPA office has been working for ten years and more, enjoying the excellent reputation that has qualified him to deal with hundreds of customers. We feel that the customer is a member of our family. His company's success and increasing its profits are goals that we never compromise to provide our utmost efforts to achieve.

The rise in the dollar rate may be a real crisis for many companies, but with a team of ECPA, “We guarantee you feel comfortable and stable.

Your first consultation will assure you of this, so we offer it. Please feel free to contact us.