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Egypt pound hits new low against dollar, maintains descent against euro

Local currency hits 6.56 against greenback, 8.77 against euro, but Egypt's new central bank governor sees no serious cause for concern

Ahram Online, Sunday 13 Jan 2013
(Photo: Reuters)
Views: 3004
Views: 3004

The Egyptian pound continued to fall against the US dollar on Sunday, hitting a record low – LE6.56 – against the greenback.

Since the end of December, the Central Bank of Egypt (CBE) has held eight foreign currency auctions aimed at rationalising the bank’s consumption of dollars and halting speculative practices.

The amounts put up for auction have fallen, meanwhile, from the $75 million offered last month to $50 million in each of two auctions held last week.

The local currency has also seen further declines against the euro, slipping by 0.34 per cent to reach 8.77 pounds to the European currency at local exchange shops, Al-Ahram's Arabic-language news website reported on Sunday.

Last Thursday, the CBE welcomed a new bank governor – Hisham Ramez – who replaced longstanding CBE head Farouq El-Oqda.

It is expected that Ramez will maintain El-Oqda's monetary policies. Since his appointment in 2003, El-Oqda has attempted to shore up the Egyptian pound against foreign currencies by tightening restrictions on speculation.

Ramez, for his part, has asserted that Egypt's ongoing currency woes should not be cause for serious concern, stressing that Egypt's banking authority was able to control it.

The new bank governor also recently declared that Egypt's inflation rate was currently "stable." Annual inflation reached 4.7 per cent in December, representing slight growth over recent months, according to official data released on Thursday.

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13-01-2013 09:53pm
The Solution: Geography
We need to stop the slide of the Egyptian pound. There are obvious solutions that can be implemented to fix our economic problems. Then there are obvious solutions that can simultaneously fix our economic problems and other problems. Expand the Suez Canal. We have the manpower, the cement, and steel to make this happen. By doing this, we can decrease unemployment by creating tens of thousands of construction jobs for Egyptians, plus more jobs in the steel and cement factories. This project will increase demand for Egyptian made steel and cement. An expanded canal will allow for more efficient operations and generate more revenue for Egypt. An expanded canal will increase Egypt's importance to the international economic community. An expanded canal will prevent any other nation in the area from attempting to make their own canal to rival Egypt's. There are economic, social, and political reasons to expand the canal. The only problem with this idea is that Egypt doesn't have the m
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