A man counts Egyptian pounds outside a bank in Cairo, Egypt October 24, 2016. (Reuters)
The Central Bank of Egypt (CBE) kept the Egyptian pound stable against the US dollar at EGP 8.78 at Tuesday’s weekly auction, state news agency MENA reported; however, the pound has significantly weakened in the black market.
According to Al-Ahram Arabic news website, the dollar was sold at EGP 18 in the black market on Monday.
Egypt, which has faced a shortage in hard currency since the 2011 uprising, relies heavily on imports of staple foods to feed its population of 90 million.
The pound has held steady against the dollar in CBE weekly auctions since a 13.5 percent devaluation in March.
For weeks, further depreciation has been expected by several investment banks to tighten the gap between official and informal rates for the US dollar, following an initial agreement signed in August between Egypt and the International Monetary Fund (IMF) on a $12 billion fund facility.
On Monday, Egypt's Parliament called for withdrawing confidence in PM Hisham Ismail's government for failing to contain the dollar shortage crisis or improve public services.
In response, Ismail said "the government is ready to take on another package of difficult economic reform decisions, but with the stipulation that these gain the support of parliament before they are finalised."
Last week, IMF chief Christine Lagarde told Bloomberg Television that Egypt is going through a currency "crisis."
Responding to a question on whether a total free float or gradual devaluation would be the wisest move, Lagarde said that the decision would "be dictated entirely by the circumstances."
Egypt’s net foreign reserves rose in September to $19.591 billion, up from $16.564 billion in August.