Dollar jumps to EGP 13.10 in black market, remains stable at regular dollar sale

Tuesday 27-09-2016 08:02 PM

American dollar notes are displayed in this photo illustration in Johannesburg August 13, 2014. REUTERS/Siphiwe Sibeko

CAIRO, Sept 27 (Aswat Masriya) - The Egyptian pound weakened on the parallel market on Tuesday reaching a high EGP 13.10 against the dollar at a time when Egypt's central bank maintained its rate at EGP 8.78, Reuters reported.

Four traders told Reuters that they were selling dollars at a range between 13.05-13.10 pounds per dollar, weaker than last week's 12.8. The black market rate recorded on Tuesday is seen as the highest since July. 

Egypt's central bank continued to hold the dollar steady at its regular foreign currency sale on Tuesday, selling $118.6 million at the unchanged rate of 8.78 per dollar.

Egypt's foreign reserves were estimated at $16.564 in August, still less than half its reserves held before the 2011 uprising that ended President Hosni Mubarak's 30-year rule.

The Central Bank of Egypt (CBE) has been under increasing pressure to devalue the currency due to the widening gap between the official and the unofficial rates amid an acute foreign currency shortage.

The CBE devalued the pound in March by around 14 per cent, but the move did not manage to crush a flourishing black market.

Egypt has cracked down heavily on foreign exchange bureaus, revoking their licences and shutting down dozens.

The Egyptian parliament set prison terms of up to 10 years and fines of up to 5 million pounds for traders selling foreign currency at black market rates early August.  

The government has requested to borrow from international financial institutions, most important of which is the World Bank and the International Monetary Fund (IMF) to boost its foreign currency supply.

Egypt is close to finalising a deal with the IMF over a three-year $12 billion funding facility meant to plug the funding gap, restore market confidence and encourage investment. 

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