News

Egyptian Pound Weakens to 11 Against Dollar on Black Market for First Time Ever

Egyptian Pound Weakens to 11 Against Dollar on Black Market for First Time Ever

An employee counts money at an exchange office in downtown Cairo Credit: Amr Abdallah Dalsh/ Reuters
An employee counts money at an exchange office in downtown Cairo
Credit: Amr Abdallah Dalsh/ Reuters

The Egyptian pound weakened on the parallel market on Tuesday reaching EGP 11 against the dollar at a time when Egypt’s central bank maintained its rate at EGP 8.78.

On Monday, the Egyptian pound was trading at EGP 10.50 and EGP 10.65 to the dollar on the black market, Reuters reported.

Egypt has been witnessing a foreign currency crisis due to pressures on its reserves as a result of a weakening tourism sector in addition to the decline in Suez Canal revenues.

At the end of March, Egypt’s foreign reserves decreased reaching $16.5 billion, still less than half of the foreign reserves Egypt had before the 2011 Uprising when they were almost $36 billion.

On Mar. 14, the Central Bank of Egypt (CBE) devalued the currency by 14.5 per cent against the U.S. dollar.

Two days later, it raised the Egyptian pound by 7 piastres, to reach EGP 8.78 against the dollar.

However, the widening gap between the official and the black market rates persists despite the central bank’s attempts to narrow it.

Fitch Ratings previously said that the recent devaluation of the Egyptian pound against the U.S. dollar would likely facilitate foreign currency liquidity in the domestic banking sector. But, the credit ratings company expected further devaluation of the pound as the central bank attempts to “completely eliminate the black market.”

Following the devaluation decision, the CBE stated that it would start adopting a more “flexible” exchange rate policy with the aim of “restoring regular and sustainable foreign exchange trading within the banking system.”

However, the CBE was not clear about what a “flexible” exchange rate policy means.

This content is from Aswat Masriya.

NGOs Allowed to Receive Foreign Funding, Rules Egyptian Court
Policeman Shot Civilians After Argument Over Price of a Cup of Tea

Subscribe to our newsletter


News
@AswatMasriya_En

Aswat Masriya is a Thomson Reuters Foundation-sponsored website that covers Egypt's transition to democracy. en.aswatmasriya.com

More in News

A snapshot from a video released on Twitter by Ansar Bayt al-Maqdis on August 28, 2014.

Australia Declares ‘Ansar Bait Al-Maqdis’ a Terrorist Organization

Egyptian StreetsDecember 10, 2016
nieuwe-groep-claimt-aanslag-cairo-961x658

Seven Killed in Giza, Kafr El-Sheikh Explosions Targeting Police

Egyptian StreetsDecember 10, 2016
1000_1472412595osama_mursi_22415

Former President Morsi’s Son Arrested

Egyptian StreetsDecember 9, 2016
azzasoliman

Egyptian Women’s Rights Activist Azza Soliman Released on Bail after Arrest

Egyptian StreetsDecember 8, 2016
Credit: Martin Roemers/Anastasia Photo

Professors and Doctors Among 45 Arrested in Egypt Organ Trafficking Ring

Egyptian StreetsDecember 6, 2016
05black

Egypt’s Foreign Reserves Rise to $US 23 Billion

Egyptian StreetsDecember 6, 2016
1200x-1-1024x697-1

Naguib Sawiris Steps Down as CEO of Orascom in Surprise Resignation

Egyptian StreetsDecember 6, 2016
One of the leaked images allegedly from a Heinz Egypt factory.

Senior Heinz Egypt Employee Arrested After 62 Tonnes of Rotten Tomatoes Found

Egyptian StreetsDecember 6, 2016
Egyptian Streets is an independent, young, and grass roots news media organization aimed at providing readers with an alternate depiction of events that occur on Egyptian and Middle Eastern streets, and to establish an engaging social platform for readers to discover and discuss the various issues that impact the region.

© 2016 ES Media UG. All Rights Reserved.