Egypt central bank holds pound steady at official rate

Tuesday 25-10-2016 04:54 PM

The Central Bank of Egypt devalues the pound against the US dollar on Mar. 14, 2016

CAIRO, Oct 25 (Aswat Masriya) - The Central Bank of Egypt (CBE) kept the Egyptian pound steady at its official rate against the dollar on Tuesday’s weekly dollar sale, while the pound’s value reportedly weakened on the black market.

The CBE said it 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.

The currency hit a new low on the black market, with dollars being sold at EGP 16.10, weaker than last week’s reported levels close to EGP 15.5, according to Reuters.

Prime Minister Sherif Ismail said in a televised interview on Monday that the country "cannot continue with two exchange rates" and stressed that the exchange rate should reflect the true value of the pound.

The Egyptian economy has been facing a severe dollar shortage, prompting speculations of a looming devaluation.

The devaluation is seen as part of the Egyptian government’s comprehensive reform programme and one of several prerequisites set by the International Monetary Fund in order for Egypt to finalise a $12 billion loan agreement this year.

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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