Egypt pound drops further

January 23, 2013 - 7:19:15 am

CAIRO: Egypt’s pound extended losses yesterday at a central bank forex auction, leaving it 6.8 percent weaker than when the sales were launched at the end of December to safeguard foreign currency reserves.

The central bank set a cut-off price at the currency sale of 6.6025 pounds to the dollar, and the pound weakened further still to 6.6354 on the interbank market. The central bank limits trades there to a 0.5 percent band above or below the weighted average of bids at the most recent currency auction.

Egypt’s foreign reserves have tumbled during two years of domestic turmoil. They stood at $36bn before the uprising and have now fallen to $15bn, covering roughly three months of imports.  The central bank has said reserves are now at a critical level, though they have held steady for months with the help of billions of dollars of support from donors, particularly Gulf states. Reuters