A customer counts his U.S. dollar money in a bank in Cairo, Egypt March 10, 2016. E REUTERS/Amr Abdallah Dalsh/
CAIRO, Aug 2 (Aswat Masriya) - The Central Bank of Egypt (CBE) kept the pound steady at 8.78 per dollar at its weekly foreign currency auction on Tuesday, the state-owned MENA reported.
The CBE devalued the pound by about 14 per cent to reach EGP 8.78 against the dollar in March in an effort to close the gap between the official and parallel rates but the move failed to boost dollar liquidity or close the gap.
The widening gap between the official and the unofficial dollar rates persists despite the central bank's attempts to narrow it. The pound changes hands at about 12 per dollar, while the banks kept the pound steady at 8.88.
Tuesday's decision comes one day after President Abdel Fattah al-Sisi said that Egyptians would "very soon" be able to purchase U.S. dollars at a unified rate.
"The next few days will see a lot of good news for the Egyptian people," Sisi said on Monday, as he announced that 'tough' measures need to be taken to fix the country's economy.
The central bank suspended the licenses of 10 foreign exchange bureaus in Cairo on Monday for one year after finding them guilty of illegally trading foreign currency.
An IMF mission, headed by Advisor at the International Monetary Fund's(IMF) Middle East and Central Asia Department Christopher Jarvis, arrived in Cairo on Saturday for a two-week visit after the cash-strapped government announced it was close to agreeing a $12 billion loan with the IMF over three years to ease its funding gap.
Egypt has been scrambling to collect money as it faces a shortage in foreign currency due to pressures on its foreign reserves after years of political turmoil, triggered by the 2011 Uprising that toppled former president Hosni Mubarak, halved the country’s foreign reserves and scared away tourists and investors, two major sources of hard currency.
The country's foreign reserves inched up in June to reach $17.5 billion, still less than half of the foreign reserves Egypt had before Mubarak's removal when they were almost $36 billion.