The Central Bank of Egypt (CBE) is looking into four scenarios for the EGP's future, a senior official told Daily News Egypt. The official explained that these scenarios include leaving the current situation as is and continuing to fix the pound’s value at EGP8.78 to the dollar; fixing the pound with a commission to provide currency for some sectors that require the US dollar; allowing for partial fluctuation of the exchange rate; or allowing for total fluctuation of the exchange rate. According to the official, CBE Governor Tarek Amer is more inclined towards implementing the latter scenario, which is allowing the exchange rate to fluctuate completely as opposed to being fixed. However, this scenario will face a challenge due to an absence of foreign exchange and strong cash reserves that help inject the required liquidity into the market in order to control the movements of the dollar. The CBE is awaiting the entrance of US dollar flows estimated at USD5.5bn over the upcoming months in order to enhance the bank’s ability to manage the exchange rate and support the foreign exchange reserves. “The CBE might deliberately be sending mixed signals about the exchange rate throughout the upcoming months with the goal of confusing US dollar speculators in order to completely eliminate these kinds of speculations,” the sources added. (Daily News Egypt)