- Title: Gold price soars in Egypt as local currency weakens
- Date: 27th December 2022
- Summary: GIZA, EGYPT (DECEMBER 8, 2022) (REUTERS) VARIOUS OF JEWELLER IN STORE POLISHING RINGS JEWELLER TAKING RING FROM SCALE JEWELLER PUTTING RING ON SCALE JEWELLER PICKING UP RING JEWELLERY STORE MANAGER, MOURAD AYYAD, WITH CUSTOMERS VARIOUS OF AYYAD INSPECTING PIECE OF JEWELLERY (SOUNDBITE) (Arabic) JEWELLERY STORE MANAGER, MOURAD AYYAD, SAYING: "The past period witnessed an unprecedented demand on gold coins and bullions which caused gold prices to soar." VARIOUS OF PIECES OF JEWELLERY ON DISPLAY IN STORE (SOUNDBITE) (Arabic) JEWELLERY STORE MANAGER, MOURAD AYYAD, SAYING: "Due to inflation and high prices, everyone resorts to bullions and gold coins whose profit margins are very low for traders. As for the jewellery pieces, demand is very low indeed." JEWELLER POLISHING BRACELET JEWELLER ORGANISING JEWELLERY CHAINS ON DISPLAY NECKLACE JEWELLER CHECKING PIECES / JEWELLERY ON DISPLAY VARIOUS OF AYYAD INSPECTING GOLD CROSS (SOUNDBITE) (Arabic) JEWELLERY STORE MANAGER, MOURAD AYYAD, SAYING: "People buy gold for saving purposes because its value will increase over time. Customers now know that gold prices increase over a short period of time, so they feel like they will keep the value of their money." VARIOUS OF AYYAD LOOKING THROUGH JEWELLERY COLLECTION IN STORE AYYAD HOLDING BRACELET VARIOUS OF CUSTOMER TRYING ON JEWELLERY (SOUNDBITE) (Arabic) JEWELLERY STORE MANAGER, MOURAD AYYAD, SAYING: "In Egypt, the price (of gold) is a little bit higher than global prices because the price of the dollar is unstable. Once the price stabilises in accordance with international prices, the price fluctuations will be very small and people can trade just fine." VARIOUS OF RINGS ON DISPLAY GIZA, EGYPT (DECEMBER 26, 2022) (REUTERS) VARIOUS OF JEWELLERY STORE OWNER, AMIR RIZK ABDOU, LOOKING AT NECKLACE (SOUNDBITE) (Arabic) JEWELLERY STORE OWNER, AMIR RIZK ABDOU, SAYING: "The gold market is unstable in a way that hasn't happened in maybe 20 years. Gold prices cannot stabilise because they are going up and down. Customers who are buying gold do not know what the price is, they are worried because it keeps going up and down, so the demand is almost zero." ABDOU IN OFFICE VARIOUS OF ABDOU HOLDING NECKLACE GIZA, EGYPT (DECEMBER 8, 2022) (REUTERS) VARIOUS OF PIECES OF JEWELLERY ON DISPLAY GIZA, EGYPT (DECEMBER 26, 2022) (REUTERS) (SOUNDBITE) (Arabic) JEWELLERY STORE OWNER, AMIR RIZK ABDOU, SAYING: "Retailers, nearly 50,000 stores, hope that gold prices go down so that we can sell, we don't like prices to be high. A customer who has 20,000 Egyptian pounds ($810 according to official rate) or 50,000 Egyptian pounds ($2025 according to official rate) buys 10 grams instead of 50 grams, which decreases our profits, because we make profits in the workmanship." ABDOU IN STORE (SOUNDBITE) (Arabic) JEWELLERY STORE OWNER, AMIR RIZK ABDOU, SAYING: "Customers are worried that they will buy at a higher price, and they are worried that the prices might go down after they buy, so demand is very low these days. When the prices stabilise, demand will increase and customers will buy. When customers want to sell now, they discover that the price has gone down. If they buy, they are told to wait because the price is expected to decrease. So those who buy can't sell (later) and those who want to buy don't actually buy." GIZA, EGYPT (DECEMBER 8, 2022) (REUTERS) VARIOUS OF NECKLACES ON DISPLAY
- Embargoed: 10th January 2023 13:58
- Keywords: Dollar Economy Egypt Gold
- Location: GIZA, EGYPT
- City: GIZA, EGYPT
- Country: Egypt
- Topics: Currencies/Foreign Exchange Markets,Economic Events,Middle East
- Reuters ID: LVA001894126122022RP1
- Aspect Ratio: 16:9
- Story Text: The price of gold in Egypt has risen to unprecedented highs as nervous savers seek refuge from a weakening currency and some companies export bullion to raise scarce dollars to fund imports, industry experts say.
Figures from the Federation of Egyptian Chambers of Commerce's (FEDCOC) gold division show the price of 21-carat gold surpassing 1,800 Egyptian pounds ($72.73) per gramme in December, what local media reports say is an all-time high.
Prices have since fallen to 1,545 pounds but it's still a jump from 673.5 pounds a year earlier and a sharp premium versus the current $50-51 on international markets.
Egypt continues to face a foreign currency shortage despite two major devaluations this year, with the gap between the official rate of the Egyptian pound against the dollar and that on the black market widening.
Its central bank in February imposed a requirement for letters of credit for most imports, causing a sharp slowdown in imports and a backlog of goods in ports.
This has prompted some importers to buy bullion in Egyptian pounds in order to export abroad as a means to access dollars, a move which Hani Milad, head of the gold division at FEDCOC, said fueled the price increase.
They have been able to use a loophole that exempts the first half million dollars per transaction of imports from requiring the letter of credit, a banker added.
The weakening Egyptian pound has also spurred demand for bullion and gold coins by individuals in order to preserve the value of their savings.
The official price of the pound has weakened to about 24.7 to the dollar from 18.8 to the dollar in March.
It is trading at about 31 on the black market.
Egypt's central bank last week hiked interest rates, signalling that it might be preparing for a further weakening of the currency.
(Production: Sayed Sheasha, Mai Shams El-Din) - Copyright Holder: REUTERS
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