Egypt depreciates pound as foreign reserves plunge
U.s.dollar - AFP/Shawn Thew

CAIRO: Egypt’s central bank depreciated the pound for a third time in 2015, after the country net foreign reserves plunged for a 3rd straight month by September-end.

Egypt’s net international reserves have fallen for three consecutive months to hit $16.3 billion at September-end, down from $18.1 billion a month earlier, the Central Bank of Egypt (CBE) reported last week.

In a sudden move, the CBE allowed the pound to weaken to hit a new official low of 7.83 per dollar at a regular foreign exchange (FX) auction, compared to 7.73 in Tuesday’s sale.

The dollar was sold at 7.93 EGP at banks Thursday, and 7.98 EGP at exchange bureau, as the CBE gave permission to trade dollars up to 0.10 pounds and at 0.15 above or below the official rate at banks and exchange bureaus to respectively.

On the other side, the pound tumbled in the parallel market to 8.20-8.22 per dollar, a trader told The Cairo Post.

In a way to bolster its foreign reserves, Egypt will receive around $800 million from a land sale to Egyptians abroad as of December-end, in addition to expected budgetary support loans from the World Bank and African Bank of Development.

The Finance Minister was quoted earlier on Wednesday as saying that Egypt will receive a $3-billion loan from the World Bank in installments over the next three years for budgetary support, Reuters reported.

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