News

Central Bank of Egypt Sells $100 Million at Exceptional Auction Following Devaluation

Central Bank of Egypt Sells $100 Million at Exceptional Auction Following Devaluation

The Egyptian Central Bank in Cairo, Egypt. Photo: Eduardo Rossi/Bloomberg News
The Egyptian Central Bank in Cairo, Egypt. Photo: Eduardo Rossi/Bloomberg News

The Central Bank of Egypt sold USD 100 million at an exceptional auction on Thursday following its surprise announcement of its move to float the local currency, state-owned Ahram Online reported.

The CBE set the initial rate at EGP 13 per dollar, allowing banks to trade within a margin of 10 percent above or below the new rate until the auction took place. The CBE also said that banks would have the freedom to bid at the rate of their choosing at the auction and that they would not be bound to the auction rate when dealing in forex with bank customers.

A banker told Ahram Online that the banks will decide their exchange rates “independently depending on [their] foreign exchange availability.”

However, bankers told Reuters earlier that the USD 100 million would not provide banks with enough liquidity to effectively trade on the interbank system and that banks were initially expecting the CBE to offer USD 4 billion at the auction.

Egypt’s central bank floated the local currency in a surprise move early on Thursday, “moving to a liberalized exchange rate regime in order to quell any distortions in the domestic foreign currency market.”

The announcement came after the pound strengthened on the parallel market, where dollars were being sold for between EGP 12 and 15, after leaders from the Federation of Egyptian Chambers of Commerce called for a boycott of the parallel market. Earlier this week, the greenback had reached an all-time high of EGP 18.

The International Monetary Fund, whose final approval for a USD 12 billion loan Egypt is waiting for, said that it “welcomes” the move to devalue the pound.

“This will make more foreign exchange available. The flexible exchange rate regime, where the exchange rate is determined by market forces, will improve Egypt’s external competitiveness, support exports and tourism and attract foreign investment,” the IMF Mission Chief for Egypt Chris Jarvis said in a statement on Thursday.

Egypt Tourism 'Will Recover,' Return to Pre-2011 Levels Next Year: World Travel Council Official
IMF 'Welcomes' Egypt's Currency Devaluation

Subscribe to our newsletter


News

More in News

Egypt Investigates Danish Couple Who Climbed the Pyramids for Nude Photograph

Nour EltiganiDecember 10, 2018

Egyptian Jews Celebrate Hanukkah Holiday With the Public

Egyptian StreetsDecember 7, 2018

Chanel Turns to Egypt for Inspiration of Modern Design

Egyptian StreetsDecember 6, 2018

Egypt Receives a Loan from the World Bank to Help Entrepreneurs and Small Businesses

Nour EltiganiDecember 5, 2018

Lawyers Drop Charges Against Rania Youssef’s Dress

Egyptian StreetsDecember 4, 2018

Egyptian HandBall Coach to Train Australia’s Women’s National Handball Team

Nour EltiganiDecember 4, 2018

First International Defence and Security Exhibition Kicks Off in Egypt

Egyptian StreetsDecember 3, 2018

Egypt Approves Legalisation of 168 New Churches

Egyptian StreetsDecember 2, 2018
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.

© 2017 Egyptian Streets. All Rights Reserved.