Egypt foreign currency reserves drop $21m in December

Ahram Online, Sunday 6 Jan 2013

Closely watched foreign reserves reached $15.014 billion by end of December 2012

An Egyptian man stands next to a giant poster of U.S. dollars inside a currency exchange office in Cairo (Photo: AP)

Egypt's foreign reserves dropped by $21 million in December, the Central Bank of Egypt (CBE) said on its website Sunday.

Net international reserves were $15.014 billion at the end of December, down from $15.035 billion the month before.

The Central Bank said last week that reserve levels were critical. In response, the bank announced last Sunday a new currency regime to gradually devalue the Egyptian pound and conserve the reserves.

This means that the CBE has ceased its relaxed support of the Egyptian pound, which it used to do by increasing the supply of US dollars in the market.

At its current level, the foreign currency reserves cover just three months worth of imports.

The reserves have plunged by more than half since the January 2011 uprising, which scared away tourists and investors, two of Egypt's main sources of foreign currency.

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