EGP stable against USD in Egypt central bank’s weekly auction

The Central Bank of Egypt maintained the Egyptian pound at a stable rate of 8.78 against the US dollar at its weekly forex auction on Tuesday, state news agency MENA reported.

The pound was lowered to this rate by a 13.5 percent devaluation in March, although economists have said they expected a further depreciation in recent weeks following statements by the bank’s governor Tarek Amer.

In July, Amer told various private and public newspapers that defending the pound over the past five years was a “grave mistake.”

Egypt, which relies heavily on imports, particularly foodstuffs, has been suffering an acute shortage of US dollars in the wake of political and security unrest following the 2011 revolution which has discouraged tourists and foreign investors, two major sources of hard currency.

The country’s foreign reserves more than halved since 2011 to reach $15.5 billion in July, with the government currently seeking a $12 billion fund facility over a three-year period from the International Monetary Fund to support the ailing economy.

Last week, the central bank said it has shut down 48 of a total of 94 licensed currency dealers as they sold the pound at a higher rate than the allotted 8.88.

Of the currency exchange bureaus closed, a total of 26 have been closed permanently and their licences revoked. The rest of the bureaus have been shut for six, eight or twelve months, in accordance to the severity of their violation.

source: Ahram Online