CAIRO: Egypt’s pound plummeted in the unofficial market after the Central Bank of Egypt (CBE) depreciated it to a new official low of 7.93 to a U.S. dollar at a regular foreign exchange (FX) auction on Sunday, up from 7.83 in a Thursday sale.
This is the lowest level the local currency has been allowed to hit since the central bank began its auctions in December 2012, amid expectations of an extended slip in the coming days.
On Sunday, the dollar was sold at 8.03 EGP at banks Sunday, and 8.08 EGP at exchange bureau, a trader told The Cairo Post.
The CBE gives permission to trade dollars up to 0.10 EGP and 0.15 EGP above or below the official rate at banks and exchange bureaus, respectively.
In the black market, the pound plunged to 8.35- 8.40 per dollar, compared to 8.20-8.22 per dollar on Thursday, another trader told The Cairo Post.
Meanwhile, black market dealers and dollar holders are reluctant to sell the hard currency, anticipating further depreciation of the pound.
After holding the pound steady at 7.73 per U.S. dollar at the official market since two consecutive devaluations in July, Egypt’s central bank depreciated the pound for a third time in 2015 on Thursday.
The move came shortly after the country’s net foreign reserves have fallen for three consecutive months to hit $16.3 billion at September-end, down from $18.1 billion a month earlier.