CAIRO: The Egyptian pound weakened to the dollar on Monday, as investors placed orders to sell the currency after a T-bill auction and ahead of an expected reopening of the stock exchange.
The pound traded as weak as 5.923 to the dollar, down 0.15 percent from Sunday’s close, but was above a 6-year low of 5.96 it hit on Feb. 8.
Traders said foreign investors were dropping the pound and buying into the greenback to settle T-bills and needs for letters of credit.
"There are outflows from foreigners, who are buying the dollar to settle T-bills after they acquired large amounts of the Egyptian pound," said one trader.
Egypt’s central bank said on Sunday it sold LE 4.5 billion ($760.1 million) in domestic treasury bills, the same amount it was seeking (CBEY).
Some investors also dumped the pound to exit the market in fear of a big sell-off when the bourse opens after more than a month-long shutdown caused by an uprising that ousted President Hosni Mubarak, traders added.
Another trader said he expected the pound to further weaken to levels close to its previous 6-year low after the stock market opens.
The currency had closed at 5.855 on Jan. 27, before the uprising erupted. It tumbled almost consistently after the mass protests, but its value has stabilized since the central bank intervened on Feb. 8 to prevent it from falling further.
The stock exchange, whose doors have been shut since Jan. 27, has said it will remain closed through Tuesday at least.
The government has postponed the exchange’s reopening several times in the last few weeks because of continuing unrest, which put further pressure on the currency.
