CAIRO, Mar 20 (Aswat Masriya) - The Central Bank of Egypt (CBE) will sell $120 million in a single foreign exchange auction every week, the bank's governor told Aswat Masriya on Sunday.
Since December 2012, the CBE holds three foreign exchange auctions every week, providing banks with hard currency. The auctions were held every Sunday, Tuesday and Thursday, with the CBE offering $40 million in each auction.
CBE Governor Tarek Amer says the auctions held on Sunday and Thursday will be cancelled and a weekly auction will be held every Tuesday.
As Egypt faces a a dollar crisis and economic instability, pressures to devalue the Egyptian pound have mounted and the CBE is trying to put an end to foreign currency trading on the black market.
Last Monday, the CBE devalued the Egyptian pound from 7.73 pounds to the dollar to 8.85, a drop by 14.5 per cent. The pound had been changing hands at 7.73 to the dollar since November.
After depreciating the pound, the CBE said it is adopting a more "flexible exchange rate regime", adding that it "will not hesitate to use all its tools and authority to maintain an orderly foreign exchange market."
In an exceptional auction two days later, the CBE raised the Egyptian pound by 7 piastres, bringing it to 8.78 pounds to the dollar.
The dollar shortage in Egypt comes after years of political turmoil have taken a toll on the economy. Egypt's foreign reserves inched up at the end of February by 56 million dollars reaching 16.533 billion, still less than half of the foreign reserves Egypt had before the 2011 Uprising when they were almost $36 billion.