Egypt pound hits new low as central bank sells dollar

The Egyptian pound weakened on Wednesday at an exceptional central bank sale of $1.1 billion aimed at supplying dollars to importers of essential foodstuffs, allowing it to hit a new all-time low in the official market.

By (Reuters)

Published: Thu 15 May 2014, 11:16 PM

Last updated: Sat 4 Apr 2015, 4:50 AM

The central bank announced a cut-off price of 7.0950 pounds to the dollar at the auction, weaker than at the last central bank foreign exchange sale held on Monday, when the cut-off price was 7.0451.

In the interbank market, the dollar changed hands for as much as 7.1049 pounds, the lowest according to Thomson Reuters data going back to the 1990s.

The rates banks are allowed to trade dollars at are determined by the results of the central bank sales, giving the bank effective control over official exchange rates. The central bank sold the entire amount it had offered.

Egypt has been suffering from a sustained dollar shortage as political turmoil following the 2011 uprising against veteran leader Hosni Mubarak unnerved foreign investors and tourists, traditionally major sources of foreign currency.

Egypt’s foreign reserves rose to $17.489 billion in April from $17.414 billion in March, but are still markedly lower than the $36 billion seen before the 2011 revolt.Banks and traders say some of the funding problems which surfaced early last year have re-emerged.

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