(AFP Photo)
Reuters – The Egyptian pound strengthened at an official auction on Monday and gained from late last week on the black market, although it remained weaker there.
The central bank said it sold $38.8m to banks at its auction, at a cut-off price of EGP 6.8773 to the dollar, compared with 6.8774 at a sale on Thursday.
One trader in the black market said he bought the dollar for EGP 7.25 and sold it for EGP 7.28 on Monday, compared with EGP 7.27 to buy and 7.30 to sell on Thursday. He posted 6.8875 and 6.9175 on his shop as official rates.
One Cairo-based currency specialist at a multi-national bank said it has become a big problem for clients to secure dollars in the official market.
“Every multi-national company in Egypt uses the black market to fulfill its needs,” he said. “They cannot afford to wait for months to request a couple of million dollars in trade finance to be fulfilled through the official markets.”
The central bank introduced dollar sales last December to help counter a run on the pound. It has burned through at least $20bn – or roughly half – of its reserves since a 2011 revolt that led to the overthrow of long-time president Hosni Mubarak. Political turmoil since then has hammered investment and the tourism sector, once major sources of foreign currency.
“Until the mechanics of the economy are working again to secure an inflow of foreign currency in the country, this crisis is going to persist,” the currency specialist said.
