CAIRO: The Egyptian pound weakened at a foreign exchange auction yesterday, sliding for the fourth time in a row at the central bank’s regular dollar sale.
It was steady on the black market, albeit still trading weaker than on the official market.
The central bank introduced dollar currency sales a year ago to help counter a run on the pound. It has burned through at least $20bn — or roughly half its reserves — supporting the currency since Egypt’s 2011 revolution, which cut into tourism revenues and foreign investment.
Underlining security concerns, 16 people were killed on Tuesday when a suicide bomber detonated a car filled in explosives next to a police building in the Nile Delta city of Mansoura.
The central bank sold $37.7m to banks at yesterday’s auction, with a cut-off price of 6.9179 pounds to the dollar, allowing it to weaken from 6.9075 at the previous sale on Monday. It had offered up to $40m.
Last week the pound weakened against the dollar for the first time since the army’s removal of Islamist president Mohammed Mursi in July after mass protests against his rule.
Black market rates
On the black market, a participant said the dollar was offered for 7.40 yesterday. Another quoted Tuesday’s price at 7.41 pounds.
The central bank has limited Egyptians from transferring more than a cumulative $100,000 out of the country since the 2011 uprising unless they can demonstrate a pressing need for the funds. In January, this limit will be raised by another $100,000,Central Bank Governor Hisham Ramez said this month.
Depositors at banks can only withdraw a maximum of $10,000 in foreign currency per day under central bank rules, but in practice many banks restrict such withdrawals to much less and demand documents to show why the client needs the funds.
Reuters
