Egyptian pound hits record low to 12.90 against dollar on black market

Egypt’s currency has weakened to a record low of 12.90 against the dollar on the black market on Sunday, as the country’s currency crisis continues to gather steam.

Black market currency rates reached 12.90 against the dollar compared to 12.50 per dollar earlier during a noon trade, banking sources told Amwal Al Ghad.

A black market for dollars has sucked up liquidity from the banking system and put a strain on the country’s foreign reserves.

The drop in the Egyptian pound’s value against the greenback comes amid speculation that a currency devaluation is underway, particularly following statements from central bank governor Tarek Amer saying that, while floating the pound is currently not possible, a second devaluation “depends on what the bank thinks at the appropriate time.”

Egypt devalued the pound by about 14 percent to 8.78 against the dollar in mid-March in an effort to crush a black market for dollars that has burgeoned amid the shortage. But the black market rate has since depreciated further, putting renewed pressure on the central bank to take further action.