Egypt's central bank keeps EGP stable in weekly FX auction

Ahram Online , Tuesday 9 Aug 2016

The pound has remained steady since a 13.5 percent devaluation in March

A customer counts his U.S. dollar notes in a bank in Cairo, Egypt (File photo: Reuters)

The Central Bank of Egypt (CBE) has kept on Tuesday the Egyptian pound stable against the US dollar at 8.78 in its weekly forex auction, state news agency MENA reported. The bank sold this week a total of $117.9 million of the $120 million it offers.

The pound has remained steady since a 13.5 percent devaluation in March although a further depreciation has been expected for several weeks following statements by the bank's governor Tarek Amer.

In July, Amer told various private and public newspapers that defending the pound over the past five years was a “grave mistake.”

Egypt, which relies heavily on imports to support its population of over 90 million, has been suffering from an acute shortage of the US currency in the wake of the 2011 uprising which was followed by political and security unrest that has turned away tourists and foreign investors, two major sources of hard currency.

Foreign currency reserves dropped two billion dollars at the end of July to register a total of $15.5 billion compared to the month before, CBE announced earlier this month.

The country said in late July that it was close to reaching an agreement to sign a lending programme with the International Monetary Fund (IMF) to ease its funding gap by seeking to secure $12 billion in financing over a three-year period.

The central bank said on Monday it has shut down 47 of a total of 94 licensed currency dealers due to them selling the EGP at a higher rate than the allotted 8.88.

Of the currency exchange bureaus closed, a total of 26 have been closed permanently and their licenses revoked. The rest of the bureaus have been shut for six, eight or twelve months, in accordance to the severity of their violations.


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