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

Former Egyptian President Hosni Mubarak Shares War Memories in Rare Appearance

Egyptian StreetsOctober 15, 2019

New IMF Chief Hails Egypt’s Economic Reforms

Egyptian StreetsOctober 15, 2019

Uncontrollable Wild Fires in Lebanon Force Residents to Leave their Homes

Egyptian StreetsOctober 15, 2019

Sisi Blames Renaissance Dam Crisis on January 25th Uprising: Egypt Bared Its Back and Shoulder in 2011

Egyptian StreetsOctober 15, 2019

Political Elite Outsider Kais Saied Elected As Tunisia’s President

Egyptian StreetsOctober 14, 2019

The Story of the 18-Year Old Boy Stabbed For Defending A Girl From Harassment

Egyptian StreetsOctober 13, 2019

The Egyptian Medical Syndicate Elects Its First Female Chairperson

Egyptian StreetsOctober 12, 2019

New Minimum Wage Raise for Civil Servants Coming Next Month

Egyptian StreetsOctober 12, 2019