Last Update 23:58

Egypt's pound drops to new low against dollar

The Egyptian pound falls to LE6.92 against the dollar in banks, trades at an average of LE7.55 in the parallel market

Ahram Online, Tuesday 23 Apr 2013
Views: 2047
(Photo: Ahram Online archive)

Egypt's ailing pound continues its depreciation, recording a new all-time low on Tuesday with an average of LE6.92 to the dollar, data from the Egyptian central bank showed.

"It is traded in the black market with an average of LE7.55 to the dollar," said Hani Genena, the head of research at Pharos Investment Bank.

Genena added that the Egyptian pound would take time to recover from devaluation, as there are liabilities the government needs to address in order to restore the stability of the currency.  

Earlier this month, Qatar, Libya and Turkey pledged a total of $6 billion to help boost Egypt's economy. The country’s foreign reserves stand at $13.4 billion.

"The coming dollars will cover Egypt's imports of staple commodities and to pay back the dues of the foreign oil companies, so perhaps by the fourth quarter of the current year 2013 we may see the Egyptian pound's upturn," Genena told Ahram Online.

The downward slide against the dollar could help shrink the country's trade deficit through reducing imports, according to Genena. 

Egypt's trade balance deficit decreased by 12 percent in January 2013 over the same month in 2012, registering LE17.79 billion (roughly $2.5 billion) in January 2013 versus LE20.2 billion a year earlier.

The Central Bank of Egypt (CBE) last week held an exceptional foreign exchange auction of $600 million that aimed at ensuring Egypt may continue to import essentials such as wheat, meat and cooking oil. The auction resulted in a cut-off price of LE 6.8720 to the dollar.

Egypt’s government is trying to accommodate the preconditions of the International Monetary fund (IMF) to obtain the eluded $4.8 billion loan, having updated its 2013/14 budget to meet the IMF's needed measures.

The IMF and Egypt hope to conclude talks for a loan deal "in the coming weeks," they said in a joint statement on Sunday.

The statement came after IMF managing director Christine Lagarde met an Egyptian delegation in Washington last weekend that included Central Bank of Egypt Governor Hisham Ramez and Finance Minister Al-Morsi Hegazy.

The Egyptian officials "are firmly committed to addressing Egypt's economic and financial challenges with the objective of restoring sustained and socially-balanced growth, and they are already taking encouraging actions in this direction," the brief statement read. 

Short link:


Comment's Title
Ahram Online welcomes readers' comments on all issues covered by the site, along with any criticisms and/or corrections. Readers are asked to limit their feedback to a maximum of 1000 characters (roughly 50 words). All comments/criticisms will, however, be subject to the following code
  • We will not publish comments which contain rude or abusive language, libelous statements, slander and personal attacks against any person/s.
  • We will not publish comments which contain racist remarks or any kind of racial or religious incitement against any group of people, in Egypt or outside it.
  • We welcome criticism of our reports and articles but we will not publish personal attacks, slander or fabrications directed against our reporters and contributing writers.
  • We reserve the right to correct, when at all possible, obvious errors in spelling and grammar. However, due to time and staffing constraints such corrections will not be made across the board or on a regular basis.

24-04-2013 12:39pm
Debt for generations
All loans which MB/FJP government will take now will be distributed among themselves and big part of it will end up in private pockets instead of building up the country. And all next future generations will have to pay this debt, which will equal to taxes increase, canceling or reducing subsidies. This is perfect example of giving power to people who have no idea of politics. What I see is MB/FJP party stilling more from Egypt now than it was done within last 50 years !!!
Comment's Title

Aware Egyptian
24-04-2013 09:01am
We did not get aid!
I'm surprised at the ignorance of this gov and these "experts". Egypt doesn't have a big manufacturing base nor a natural resource wealth. A weaker pound doesn't increase exports in Egypt as a majority of manufacturing input components are imported.So our export prices increase.So do our imports creating a bigger imbalance,bigger demand on dollars and further depreciation of the pound. Also the money we got from Qatar etc was no gift, these are loans and deposits that need to be repaid, with interest, in dollars. This president has increased the financial burden on this and the next generation,without doing anything to increase income. We voted and chose the death of our country.
Comment's Title

23-04-2013 11:17pm
What was President Morsis comment on the issue beginning of January? "We will fix this problem within days"! Any questions?
Comment's Title

© 2010 Ahram Online. Advertising