Egyptian pound weakens more in wake of latest devaluation

Egyptian pound weakens more in wake of latest devaluation
2 min read
In a new blow, the Egyptian pound fell as low as 27.1 per dollar after fluctuating more than usual, Refinitiv data showed, with black market dealers offering 30 pounds to the dollar on Thursday.
The Egyptian pound is currently experiencing massive drops against the US dollar [Getty]

Egypt's currency weakened on Thursday by about 2 percent against the US dollar, though bankers said trading was thin and demand for dollars high following the third effective devaluation of the pound in less than a year.

The pound fell as low as 27.1 per dollar after fluctuating more than usual, Refinitiv data showed. Black market dealers on the street were offering 30 pounds to the dollar on Thursday.

On Wednesday the pound slid by about 6.8 percent, its biggest one-day move since October when it was last allowed to drop sharply.

Currency flexibility has been a key demand of the International Monetary Fund, which agreed a 46-month, $3 billion financial package for Egypt late last year.

A year ago the pound traded in a tight range below 16 per dollar. After the central bank allowed the pound to depreciate sharply in March and October last year, it soon resumed trading within a tight band, moving only about 0.1 EGP per dollar.

Despite the devaluations a shortage of foreign currency has continued to hamper imports in recent months.

Authorities announced last week they had phased out restrictions on accessing dollars for imports that had been in place since February.

Two bankers said trade in the pound was thin and demand for dollars remained high on Thursday as banks struggle to clear a huge backlog of orders.

The demand for dollars includes a mix of imports both already on their way and others newly ordered, one of the bankers said.

(Reuters)