CBE keeps EGP stable against US dollar in FX auction

The Central Bank of Egypt (CBE) kept the local currency’s rate stable at EGP 8.78 against the US dollar at Tuesday’s regular forex auction, state news agency MENA reported citing anonymous bankers.

The CBE sold local banks $118.6 million out of the $120 million offered in an attempt to meet their needs for strategic and basic imported goods as Egypt – which has been facing shortage in hard currencies since the 2011 uprising – relies heavily on imports of staples to feed its population of 90 million.

The exchange rate, set by the CBE on Tuesday was unlike some expectations of another devaluation that might have happened to tighten the gap between official and informal rates for the US dollar.

The dollar changed hands at about EGP 11.40-11.50 on the black market on Tuesday, Al-Ahram Arabic news website reported citing traders.

Egypt’s net foreign reserves rose slightly to $17.546 billion at the end of June, up from $17.52 billion at the end of May.

Egypt’s annual headline inflation hit the highest level in 30 months to register 14.8 percent in June 2016, state statistics body CAPMAS stated on Sunday.

In March, the CBE weakened the Egyptian pound by 14 percent of its value against the dollar in an attempt to eliminate black market trading, a move that led to price increases.

Source: Ahram Online