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Egypt's central bank devalues pound by almost 15 pct against dollar
2016/3/15 15:27:27 Source:Xinhua

CAIRO, March 14 (Xinhua) -- The Central Bank of Egypt (CBE) on Monday devalued the local currency by 14.5 percent, to 8.85 per U.S. dollar from 7.73, in an attempt to rein in the black market that has recently flourished.

The CBE said it would sell 200 million dollars at the rate of 8.85 Egyptian pounds to the dollar in an exceptional auction, official MENA news agency reported.

Egypt's economy has been facing a severe dollar crisis that hindered business activity.

Last week, the Egyptian pound weakened to 10 to the dollar on the black market.

The central bank offers bids to sell dollars to banks three times a week.

The CBE is attempting to cover the needs of importing basic commodities, Rashad Abdou, economic expert and head of the Egyptian Forum for Economic Studies, said.

"The decision aims to bolster the foreign cash reserve, as the country faces an acute dollar shortage," Abdou said.

The CBE seeks to reassure the investors who depend totally in their business on the dollar by pumping more liquidity in the banks, he noted.

Egypt's foreign reserves have dropped to 16.48 billion dollars from 36 billion in the aftermath of the 2011 uprising that overthrew long-time ruler Hosni Mubarak.

The country has seen a drop in the revenues of the tourism and the Suez Canal, main sources of foreign currency.

On the Cairo stock exchange, the benchmark EGX30 rose more than 6 percent on Monday, buoyed by news of the long awaited devaluation.

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