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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
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(Photo: Reuters)
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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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