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RESERVES DROP

Egyptian Central Bank

Egyptian pound hits record low against dollar

Cairo, January 8, 2013

The Egyptian pound fell to a new record low against the US dollar on Tuesday, extending its decline to 4.6 per cent since December 30 when the central bank began a new system of auctions to contain a currency crisis.

Hit by political turmoil, the pound weakened the maximum amount allowed at Tuesday's central bank auction. The cut-off price was 6.4492 pounds to the dollar - a 0.5 per cent fall from Sunday when the cut-off price was 6.4185 pounds to the dollar.

The central bank sold $60 million in the interbank market at the auction - the same amount it had offered. The sale means the central bank has sold $420 million of foreign currency since introducing the system.

The weakening is in line with the central bank's interbank trading band, which it narrowed last week to plus or minus 0.5 per cent from the previous 1.0 per cent.

The pound weakened on the interbank market to around 6.48 to the dollar, compared with about 6.185 before the foreign currency auctions were introduced.

The Egyptian currency has lost more than a 10th of its value since the uprising that swept Hosni Mubarak from power in February, 2011.

Tuesday's auction was the first since Sunday. Banks were closed on Monday for a public holiday marking Coptic Christmas.

The central bank introduced the system of foreign currency auctions after declaring that the country's foreign reserves were at a critical level that economists say will cover a little more than two months of imports.

The reserves stood at $15.015 billion in December - a $21 million decline from November, the central bank said on Sunday. The drop was less than economists had expected. – Reuters




Tags: Egypt | Cairo | Dollar | Pound |

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