US Dollar Inches EGP 0.33 Higher Since CBE’s FX Auctions Launched

The exchange rate of the U.S. dollar has closed at EGP 6.63 (buy price) and EGP 6.70 (sell price) against the Egyptian Pound on Thursday.

It is worth noting that the U.S. dollar has inched EGP 0.33 higher since the FX Auction mechanism came into effect on 30/12/2012. Egypt’s Central Bank (CBE) decided to apply the FX auction mechanism in order to provide the local banks with the U.S. currency aiming to stabilize the exchange rates and save dollar liquidity for the market.

During the first week of Central Bank’s offering dollars, the U.S. currency’s exchange rate hit EGP 6.37 (sell price) to eventually reach by the end of the first week EGP 6.45 (buy price) and EGP 6.48 (sell price).

During the second week, dollar’s exchange rate continued to boom to end at EGP 6.54 (buy price) and EGP 6.57 (sell price). Furthermore, the U.S. currency hiked to EGP 6.70 (sell price) by the end of the third week of offering dollars.

For the fourth week, the country’s Central Bank decided to reduce the number of days of offering dollars to 3 days only (Sunday, Tuesday and Thursday).  Accordingly, dollar’s exchange rate has witnessed a relative stability as on Sunday and Monday, it hit EGP 6.65 (sell price); while on Tuesday and Wednesday, it reached EGP 6.67 (sell price). For Thursday, the dollar’s exchange rate hit EGP 6.70 (sell price), representing an increase of EGP 0.5 in a week.

Egypt’s Central Bank has offered 11 FX auctions since launching the new system on 30/12/2012. The total amount that the CBE has offered since launching the system reached $745 million.

The total amounts that CBE has offered in 11 FX auctions are as follows: