Egypt won’t float currency until FX reserves reach at least $25 bln

Egypt is “definitely not going” to float its currency with foreign currency reserves at their current level, the governor of the Central Bank of Egypt (CBE) said on Sunday.

“When reserves reach $25 billion to $30 billion, we will consider it,” said Governor Tarek Amer in a televised interview when asked about whether the CBE was considering floating the Egyptian Pound, seen as overvalued by many, in the midst of a foreign currency shortage crisis.

Egypt’s reserves of foreign currency currently stand at $16.5 billion, having dwindled down from $36 billion following the 2011 revolution which toppled Hosni Mubarak after the country was hit by years of political turmoil.

The CBE has been controlling the value of the pound, which after a series of controlled devaluations is now trading officially at 7.73 against the U.S. dollar, and is changing hands at 9.10 to the dollar on the black market, according to traders surveyed by Reuters on Sunday.

Egypt’s imports bill officially amounted to $76 billion last year, said Amer, but imports amounted to $90 billion in reality, given that a quarter of importers understate their bills.

“In the same period, $9.6 billion worth of foreign goods were smuggled into the country,” Amer added.

source: Ahram Online