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Currencies |
| EGYPTIAN POUND |
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| Introduction
| Overview | Structure
| History | Factors
affecting change in exchange rates | Daily
trend of Egyptian pound | Weekly
trend of Egyptian pound |
| Introduction |
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Pound is referred to one of the oldest the currency units that is
being still used in many countries including United Kingdom,
Egypt, Cyprus, Syria and Sudan. United Kingdom pound or in other
words, Great Britain pound is considered to be the most important
pound denominated currency among the countries mentioned above.
Other important pound denominated currencies include the Egyptian
pound on the second place.
Egyptian pound is counted as the national
currency of Arab Republic of Egypt. The currency is also denoted
with the signs LE, L.E. (derived from the French name given to the
Egyptian pound i.e. livre égyptienne) and also with the signs E£
and £E. In Arabic language, the currency is noted as "ج.م" that translates to "gunaih" in English.
According to ISO 4217 regulation, EGP is the currency code and 818
is the numeric code for the currency. The subunit is being served
by "piasters" and "milliemes". Egypt had been
using the pound currency since 1836.
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Overview
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Egypt is the most populous Arab country in the world and lies on
the 2nd place in context of size of economies of the Arabian
countries. The economy of the country has been dominated by the
agriculture, tourism and petroleum sector but still has a huge
trade deficit. That is why there is a need of further improvement
in the value of the currency so that Egypt could pay back most of
the loans and reduce financial burdens. Currently, the notes,
which were issued in or after 1978, are still in circulation and
the earlier notes have been withdrawn from the economy. The import
and export limit of the local currency extends up to 5000 pounds
but there shall be no limit in the import and export of foreign
currencies.
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Structure
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The structure of the Egyptian currency is mostly
based around the banknote version of the
currency and not the coinage. "Piastre"
is the decimal sub unit of Egyptian pound with
"milliemes" that are 1/1000 of one
unit of the currency. The sole right to issue
and circulate Egyptian pound is with the Central
Bank of Egypt as well as the coinage minting
function is looked after by the bank. The
banknotes are issued in 10 face values making it
the more dominating version. The denominations
include 5, 10, 25 and 50 piastres, 1, 5, 10, 20,
50 and 100 pound notes. The central bank does
not issue 5 and 10 piastres notes and hence they
are issued by the state. All the notes are
printed in Arabic language on the front side and
possess images of various mosques in Egypt. The
backside of the note is printed in English
language and has different images of important
Egyptian buildings. The notes currently in
circulation posses the images mentioned in the
following list
- 100-pound note - Image of Sultan Hassan
mosque on the front and Sphinx head on the
backside
- 50-pound
note - Image of Abu Hariba mosque on the
front and Edfu temple on the backside
- 20-pound
note - Image of Mohammed Ali mosque on the
front and pharaonic drawings on the pillars
of Sesotris I temple on the backside
- 10-pound
note - Image of Refa’ie mosque and statue
of Chefren on the backside
- 5-pound
note - Image of Ibn Touloun mosque and
pharaonic drawings on the backside
- 1-pound
note - Image of the mosque of Sultan Qaitbay
on the front side and a part of facade of
Abu Simbel temple on the reverse side
- 50-piastre
note - Image of Al Azhar mosque on the
obverse side and the statue of Ramsis II on
the reverse side
- 25-piastre
note - Image of Al-Sayida Aisha mosque on
the front side and the eagle of Salah El Din
on the backside.
The coins in the currency
are minted for six face values that are 5, 10,
20, 25 and 50 piasters and 1 pound.
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| History |
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Before the mid 19th century, some locally minted coins
were used for exchange in Egypt in absence of an
official currency of the country. In 1834, a
parliamentary bill was passed related to the
introduction of new currency and the same was executed
in 1836 when the Egyptian pound came into existence.
The currency was initially based on a bimetallic
standard i.e. gold and silver but due to fluctuations
in the value of silver and adoption of the gold
standard by most of the countries with whom Egypt
traded to, it too had to adopt de facto gold standard
in 1885. Also, at this time, the subunit of the
currency countered a major change when the subunit of
Egyptian pound i.e. piastre was subdivided into tenths
instead of "para" that had value 1 piastre =
40 paras initially.
In 1898, the National bank of
Egypt was formed and one year later it issued the
first banknotes in the history of the country. These
notes were convertible into gold in the initial years
but in 1914, a law was passed relating to the
dependency of the banknotes and they were legal
tender. In 1916, the tenths to piasters were renamed
as "milliems". With time, emphasis was given
to convert the whole monetary system of Egypt into a
banknote-based system as many technological
improvements in the notes were introduced. In 1961,
the Central bank of Egypt and the National Bank of
Egypt were amalgamated to form the central bank of the
country named Central Bank of Egypt and was provided
with the rights to manage and control the currency.
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| Factors
affecting the exchange rates between two countries
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The volatility in the foreign exchange rates
depends upon a numerous macro economic factors that
have different degrees of importance to different
economies of the world. Some special and exceptional
factors affecting the rates may also exist in the case
of different countries. Following are shown the common
factors on which the foreign exchange rate depends
- Flow of imports and exports between the
countries
- Flow of capital between the countries
- Relative
inflation rates
- Fluctuation limits on exchange rate
imposed by the governments of the countries
- Merchandise trade balance
- Rate of inflation in the country
- Flow of
funds between the countries for the payment of
stock and bond purchases
- Relative growth
- Short term
and long term interest rate differentials
- Cost of borrowings
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