Jarir expects SAR 64 mln in FX losses from Egyptian pound float

Jarir Marketing Co. said it expects to incur almost SAR 64 million in losses from FX exchange at its wholly-owned subsidiary, Jarir Egypt Financial Leasing, due to the floatation of the Egyptian pound.

The FX translation will be recorded in negative under shareholders’ equity in the company’s consolidated financial position, the company said in a statement to Tadawul. 

The amount will mainly depend on the Egyptian currency’s exchange rate against the Saudi riyal by the end of the year.

“For the sake of assessing the possible financial impact, if the exchange rate is SAR 1 = EGP 4.5 at end of 2016, the negative component within shareholders equity is estimated to be around SAR 64 million,” Jarir said.

The Central Bank of Egypt (CBE) last Thursday decided to freely float the pound and hike interest rates by 300 basis points. The official rate of the pound to the dollar is currently hovering near 18.00 EGP, according to the CBE.