CAIRO: Egypt’s pound extended losses against the US dollar at Sunday’s central bank sale of foreign exchange, leaving the currency 6.6 per cent weaker than when auctions were introduced at the end of December.
The pound has now weakened by more than 12 per cent since the uprising against Hosni Mubarak in January 2011 that toppled the leader of 30 years and set off two years of political turmoil and violence, driving away investors and hammering the economy.
The central bank accepted bids worth $74.3 million with a cut-off price of 6.5875 Egyptian pounds to the US dollar at the 12th auction since it introduced the system to try to curb a fall in foreign reserves that are at critical levels. The cut-off price at the previous auction, held on Thursday, was 6.57 pounds.
On the interbank market - where the central bank limits trades to a 0.5 per cent band above or below the weighted average of bids at the most recent currency auction - the pound slid to a fresh low of 6.6203 pounds to the US dollar.
The central bank, whose reserves stood at $36 billion before the uprising, has spent $21 billion from those reserves plus additional cash granted or lent by Gulf and other backers in a bid to prop up the Egyptian currency.
Reserves have hovered around $15 billion for months, even as donors have stumped up cash, with Qatar one of the main backers. The central bank has said reserves are at a critical level, covering roughly three months of imports.
Finance Minister Al-Mursi Al-Sayed Hegazy told reporters on Sunday that Qatar had provided Egypt a total of $5 billion in support, made up of grants worth $1 billion, deposits at the central bank worth $1.5 billion and $2.5 billion of bond buying.