Egypt's central bank keeps pound steady at regular dollar sale

Tuesday 18-10-2016 02:52 PM

Central Bank of Egypt (CBE) - Archive

CAIRO, Oct. 18 (Aswat Masriya) - The Central Bank of Egypt (CBE) kept the Egyptian pound steady against the dollar at Tuesday's weekly auction of foreign currency.

The central bank sold $120 million at the weekly sale, with the cut off price stable at the official rate of 8.78 pounds per dollar, MENA reported.

Investment banks had projected an imminent devaluation of the Egyptian pound in the past days as Egypt approaches a final agreement with the International Monetary Fund (IMF) over a three-year $12 billion loan.

IMF chief Christine Lagarde said earlier last week that Egypt "almost completed" prior actions necessary for the IMF’s board to formally approve the loan.

The remaining actions pertain to both the exchange rate and the subsidies, according to Lagarde.

She explained that the first tranche can be released once the board has met, reviewed and approved the proposal.

Egypt announced that its net foreign reserves jumped to $19.59 billion at the end of September, its highest in over a year. The central bank governor has said he would consider letting the pound float freely if reserves exceed $25 billion.

The country had roughly $36 billion in reserves before the 2011 uprising.

In March, the Central Bank of Egypt devalued the pound by about 14 percent to reach EGP 8.78 against the dollar in an effort to close the gap between the official and parallel rate. 

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