Egyptian pound to US dollars (Photo: AP)
Egypt's finance ministry lowered the customs dollar on Tuesday, for the second time in a month, to reach an exchange rate of EGP 15.75 down from EGP 16 in February, effective as of 1 March until mid-March, state news agency MENA reported.
The official exchange rate of the Egyptian pound against the dollar started to decline from 18.5 in January to currently register an average of 15.7, for the past week, according to three major banks in Egypt on Tuesday.
The new rate reflects the recent leap in the Egyptian pound's value against the greenback, Finance Minister Amr-El Garhy said, according to MENA.
In the parallel black market, the exchange rate of the dollar stands at EGP 17 on Tuesday, according to one trader contacted by Ahram Online.
In mid-February, Egypt fixed the exchange rate of the customs dollar at EGP 16 while in January at EGP 18.5 after the pound's value weakened significantly reaching EGP 19 against the dollar only one month after the Central Bank of Egypt (CBE) decided to float the pound.
The rate of the custom dollar is revised every 15 days.
The CBE freely floated the pound from its fixed EGP 8.88 rate against the dollar in early November as part of a set of economic reform programme to alleviate Egypt’s flagging economy.
In February, the CBE said the country's foreign reserves reached $26.3 billion at the end of January 2017, up from $24.2 billion in December 2016.
The increase in foreign reserves came as Egypt received a total of $4 billion in yields from Eurobonds issued on the global bond market, in addition to the first tranche of a loan from the International Monetary Fund worth $2.75 billion -- part of a $12-billion financing package.
Egypt held $36 billion in reserves before the 2011 uprising, which overthrew long-time president Hosni Mubarak, ushering in a period of political turmoil, scaring away tourists and foreign investors -- two key sources of foreign currency.