Egypt Central bank sells $120 mln at regular FX auction
Egypt Central Bank - YOUM7 (Archive)

CAIRO: Egypt’s central bank kept the pound steady at 8.78 per dollar at its regular auction on Tuesday, selling $120 million to cover multinational companies’ needs to clear payment backlogs for the import of staples and pharmaceutical goods.

Egypt, which relies heavily on imports, has been facing a dollar shortage since a popular uprising in 2011 drove away tourists and foreign investors, both major sources of hard currency.

The central bank had been keeping the pound artificially strong through regular weekly auctions, giving the priority of dollar allocation to the imports of essential goods.

But on Tuesday it specified that the dollars would go to cover multinational backlogs for the imports of staples and pharmaceutical goods.

Egypt’s reserves more than halved to $16.5 billion in February from around $36 billion in 2011.

One black market trader said the pound had strengthened marginally on Tuesday to 9.9 pounds per dollar compared with around 10 pounds per dollar a day earlier. He did not give volumes of trade.

The central bank had devalued the pound to 8.85 per dollar from 7.73 on March 14 and announced it would pursue a more flexible exchange rate. It later strengthened the pound to 8.78 per dollar.

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