Egypt pound rebounds from flotation slide

 20 Feb 2017 - 18:41

Egypt pound rebounds from flotation slide
A customer exchanges US dollars to Egyptian pounds in a foreign exchange office in central Cairo, November 3, 2016 (REUTERS / Mohamed Abd El Ghany)

AFP

Cairo: The Egyptian pound strengthened against the US dollar on Monday, regaining ground after record lows which followed the central bank's decision to float the currency in November.

After plunging to 8.83 pounds against the dollar before the flotation to almost 20 in December, the pound has strengthened since last week to reach less than 16 against the dollar.

Faced with plummeting foreign currency reserves since its 2011 revolution, the central bank floated the pound and the government cut fuel subsidies, in moves which helped secure a $12-billion loan from the International Monetary Fund.

International investors, reacting favourably to the flotation, have since shown strong interest in government bonds and treasury bills.

The inflows as well as the IMF loan's first tranche worth $2.75 billion have made dollars more available, said Ahmed Abdelnaby, a strategist at Mubasher Financial Services.

But he cautioned that Egypt has yet to see a substantial increase in direct investments.