Egypt’s pound weakened further by political crisis
CAIRO — Egypt’s pound weakened against the dollar on Sunday, as street violence and deaths added to the political crisis, extending a steady decline at the central bank’s foreign exchange auctions since their launch last month.
One analyst said trading was cautious but not panicked after a weekend of flare-ups across Egypt. Repeated eruptions of violence have weighed heavily on the pound, which has been hitting fresh lows against the dollar.
At 6.500 to the dollar, the pound has lost about 7% of its value since the auctions began at the end of December. It is about 12.5% weaker than before the uprising that ousted Hosni Mubarak in 2011.
At the latest auction on Sunday, the central bank said it had accepted bids worth $48.1m with a cut-off price of 6.6235 Egyptian pounds to the dollar.
Egypt’s economy, battered by two years of political and street turmoil, has been helped by injections of cash from Gulf and other donors. But delays in securing a $4.8bn International Monetary Fund loan have worried investors.
On the interbank market, the pound weakened to 6.500, about the maximum allowed under central bank rules that let the currency move in a band of 0.5% either side of the weighted average of bids at the most recent auction.
The auctions were launched in a bid to preserve Egypt’s foreign reserves, which have fallen to a critical level of about $15bn, or three months’ worth of imports.