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Égypt-actus
revue de presse sur l'actualité culturelle, archéologique, politique et sociale de l'Égypte
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Egypt pound will not collapse: presidential aide

Egypt pound will not collapse: presidential aide | Égypt-actus | Scoop.it

The Egyptian pound will not collapse and its incremental depreciation has stabilized, a senior aide to Islamist President Mohamed Mursi said on Sunday.

Essam Haddad, Mursi's deputy chief of staff and foreign policy adviser, told Reuters in an interview that he did not expect the pound to fall further after it lost more than 8 percent against the dollar since the start of the year.

"I think it has reached a level of stability," he said.

 

"So as long as it (depreciation) is going incrementally and in a way that is market-sensitive, then there is no harm in this," Haddad said.

 

More than two years of political instability following the overthrow of President Hosni Mubarak in 2011 has triggered a flight into dollars. The Egyptian pound has faced extra pressure since late last year, when violent protests against President Mohamed Mursi erupted, setting back hopes for economic recovery. (...)

 

BLACK MARKET

A black market in hard currency has sprung up in recent weeks due to a shortage of dollars, with street traders quoting the pound at more than 7 to the dollar compared to an official rate of 6.73.

Regulated foreign exchange bureaux are swamped by demand for dollars and cannot meet the demand, the head of the foreign exchange department at the Chambers of Commerce

 

More on: http://www.reuters.com/article/2013/02/17/us-egypt-currency-presidency-idUSBRE91G0FB20130217

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Egypt Offers Banks $50 Million as Violence Weighs on Pound

Egypt Offers Banks $50 Million as Violence Weighs on Pound | Égypt-actus | Scoop.it

Egypt’s central bank will offer $50 million at a currency auction today as the pound weakens amid an escalation of unrest since the second anniversary of the Jan. 25 uprising. The benchmark dollar bonds fell for a third day.

The regulator will auction $50 million to local lenders, which are able to bid for as much as $7 million each, according to its announcement on Bloomberg. The central bank sold $48.1 million of the U.S. currency at a Jan. 27 auction, the smallest amount since it started the sales on Dec. 30 in a bid to conserve foreign reserves. Banks received about 28 percent of what they sought that day.(...) The currency’s depreciation accelerated after the last auction as clashes in several Egyptian provinces killed more than 50 people, according to Health Ministry estimates. (...)

 

The central bank will also offer 5 billion Egyptian pounds ($751 million) of seven-day repurchase agreements today. The contracts allow government-debt holders to sell securities back to the regulator for access to temporary funds at 9.75 percent.

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Egypt pound hits record low after c.bank auction

Egypt pound hits record low after c.bank auction | Égypt-actus | Scoop.it
Egypt-actus's insight:

(Reuters, via Aswat Masriya) - The Egyptian pound hit a record low on Tuesday after weakening again at a central bank U.S. dollar auction designed to stem a decline in the country's dwindling foreign currency reserves.

The central bank said the cut-off price at the Tuesday auction was 6.4492 pounds to the dollar - a 0.5 percent fall from Sunday when the cut-off price was 6.4185 pounds to the dollar. The central bank said it had sold $60 million at the auction - the same amount it had offered.

The weakening is in line with the central bank's interbank trading band, which it narrowed last week to plus or minus 0.5 percent from the previous 1.0 percent.

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Egypt pound slides on IMF loan worries

Egypt’s pound weakened further against the dollar at the central bank’s foreign exchange auction Tuesday on worries that turmoil on the streets could further delay a long-awaited IMF loan.

 

At Tuesday’s foreign exchange auction, the central bank set a cut-off price of 6.6525 pounds to the dollar, prompting the currency to weaken to 6.6857 on the interbank market, where the authorities limit how far the currency can move.

 

The pound has now lost 7.5 percent of its value against the dollar since the central bank began auctions at the end of December to try to preserve foreign reserves, which now barely cover three months of imports. The currency has been hitting a series of record lows.(...)

 

“I’m worried about the IMF deal in light of all of this [violence],” said one Cairo analyst, adding that he did not expect that a deal was imminent.

 

“I’d like to see the government sell the fiscal reforms it had planned to the people on the street now. If it does, there’s a good chance we will see more violence erupt. If it doesn’t, then we’re not getting the money,” he said.

(...)

 

The IMF has not set a date for when a team will return to Cairo for talks on the deal. Presidential spokesman Yasser Ali told reporters that “in the coming few days the IMF will decide on its visit to Egypt.” He did not elaborate.

Egypt-actus's insight:

Securing the IMF loan is seen as a vital step toward stabilizing the economy, both by providing a cash injection to bolster reserves and by offering an IMF seal of approval on the government’s reform program that would reassure investors.

 

“We think the pound could fall by a further 10 to 15 percent to around 7.50 [to the dollar], although much hinges on the progress of talks with the IMF. Meanwhile, the region’s equity markets have underperformed other emerging markets,” London-based Capital Economics wrote.

 

At current levels, the pound has weakened by 13 percent to the dollar in the two years since the uprising that toppled Hosni Mubarak and plunged the nation into turmoil. If it hits 7.50, the currency would have fallen about 22 percent.

On the interbank market, the central bank limits trades in a 0.5 percent band above or below the weighted average of bids at the most recent currency auction, limiting how far it can move.

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Egypt pounds dips, weekend violence prompts caution

Egypt pounds dips, weekend violence prompts caution | Égypt-actus | Scoop.it

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 that killed at least 41 people. 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 percent of its value since the auctions began at the end of December. It is about 12.5 percent 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 $48.1 million with a cut-off price of 6.6235 Egyptian pounds to the U.S. dollar.

"There is an overall sense of caution as the market absorbs the current developments on the street, but no panic or overreaction," said Youssef Kamel, a fixed income analyst at financial firm Rasmala.(...)

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