LISBON: Egypt’s central bank has not intervened in the foreign exchange market since early February, the bank’s deputy governor said on Thursday, and sharp falls in international reserves are likely to ease off.
The central bank intervened a few days after the market reopened in early February, following the ousting of Hosni Mubarak as president, Hisham Ramez told a news briefing on the sidelines of the African Development Bank’s annual meeting.
"Since that day, we did not intervene," he said. "We did not touch the market." The Egyptian pound, which operates under a managed float system, has been relatively stable in the aftermath of Egypt’s revolution, but analysts have said the central bank is supporting it. They estimated the bank spent $15 billion supporting the pound since January.
International foreign exchange reserves have dropped by $9 billion this year, but Ramez said this was due to a fall-off in tourism and export revenues.
Reserves fell only $800,000 in May from April, to $27.23 billion.
"The reserves went down…the trend is now moderating," Ramez said.
Egypt agreed a $3 billion deal with the International Monetary Fund on Sunday and the World Bank and the European Bank for Reconstruction and Development are among other lenders also expected to provide support.
The AfDB is discussing a similar deal for Egypt to that recently agreed for Tunisia, president Donald Kaberuka told the opening ceremony of the AfDB meeting on Thursday.
The AfDB has approved a $500 million loan to the Tunisian government as part of a $1.4 billion program financed by the World Bank, European Union and French development agency.
