EGP stable against USD in weekly auction, continues to weaken in black market

Ahram Online , Tuesday 18 Oct 2016

The dollar’s rate on the black market registered EGP 14.80 up from EGP 14.00 last Tuesday

A customer counts his US dollar notes in a bank in Cairo, Egypt. (Photo: Reuters)

The Central Bank of Egypt (CBE) kept the Egyptian pound stable against the US dollar at 8.78 on Tuesday’s weekly auction, state news agency MENA reported, although the pound continues to weaken in the parallel black market.

The dollar’s rate on the black market registered EGP14.80, Ahram Arabic website reported on Tuesday, up from EGP 14.

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.

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.

IMF director Christine Lagarde said in a press briefing last week that "there are several prior actions which need to be completed before the board can actually meet in order to formally approve [the loan]," adding that the remaining actions are "in relation to both the exchange rate and in relation to subsidies."

Egypt’s net foreign reserves rose in September to $19.591 billion, up from $16.564 billion in August, the CBE announced last week.

Last week, Egypt said it received a $2 billion deposit from Saudi Arabia, moving the country closer to securing the finance needed to seal the prospective IMF loan.

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