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Egypt pound hits new low against dollar

Cairo, January 17, 2013

The Egyptian pound weakened to a new record low against the US dollar on Thursday, extending its losses to 6.4 percent since the central bank introduced a new system of foreign currency auctions to curb a decline in foreign reserves.

Following Thursday's auction of dollars, the pound weakened to 6.60 against the dollar on the interbank market, compared to 6.58 on Wednesday.

The auctions introduced on Dec. 30 are part of a shift in currency policy designed to curb the fall in foreign reserves, which the central bank has warned are at a critical low.

The Egyptian currency has been weakened by selling from speculators worried by political turmoil. Further deep losses risk a surge in inflation that would hit ordinary Egyptians hard.

At Thursday's auction, the central bank said it had accepted bids worth $72.9 million with a cut-off price of 6.57 pounds to the dollar. It was the central bank's 11th foreign currency auction. It had offered $75 million at Thursday's auction.

The cut-off price at the previous auction, held on Tuesday, was 6.55 to the dollar.

On the interbank market, the central bank limits trades to a 0.5 percent band above or below the weighted average of bids at the most recent currency auction, limiting how far it can move. – Reuters




Tags: Egypt | Dollar | Pound | Auction | Foreign currency |

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