CAIRO: The Egyptian pound weakened at a forex auction yesterday, extending a series of falls at the central bank’s regular sale of dollars, but was stronger on the black market, narrowing the gap between the two valuations.
The central bank sold $38.6 million to banks, with a cut-off price of 6.9386 pounds to the dollar, allowing it to weaken from 6.9282 at the previous sale on Thursday. It had offered to sell up to $40m. On the black market, a trader said the dollar was offered at 7.30 to the dollar on Monday. Thursday’s rate was 7.32.
The central bank introduced dollar currency sales a year ago to help counter a run on the pound. It has burned through at least $20bn — or roughly half its reserves — supporting the currency since Egypt’s 2011 revolution.
This month, the pound weakened against the dollar at auction for the first time since the removal of president Mohammed Mursi. The interim government has declared itself in a “war on terrorism” as it prepares for a constitutional referendum in mid-January that is expected to lead to presidential and parliamentary elections.
The central bank has limited Egyptians from transferring more than a cumulative $100,000 out of the country since the 2011 uprising unless they can demonstrate a pressing need for the funds. In January, this limit will be raised by another $100,000, Central Bank governor Hisham Ramez said.
Depositors at banks can only withdraw a maximum of $10,000 in foreign currency per day under central bank rules, but in practice many banks restrict such withdrawals to much less and demand documents to show why the client needs the funds.
Reuters
