Central Bank auction temporarily stabilizes dollar-pound exchange rates

Central Bank auction temporarily stabilizes dollar-pound exchange rates

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Thu, 03/01/2013 - 16:56

Dollar exchange rates in Egyptian banks have stabilized at the amount of LE6.42 for buying and LE6.39 for selling, with banking experts pointing to the Central Banks foreign currency auction as the reason.

In its fourth auction Sunday, the Central Bank called on banks working in the Egyptian market to offer bids to purchase US$75 million, which will be put on sale Thursday.

The auction is an attempt to ration the use of Egypt's foreign currency exchange, which has lost over 60 percent of its volume since the January 2011 revolution.

Tamer Youssef, the treasury director at a foreign bank operating in Egypt, said that the auctions  aim to provide for the foreign exchange needs of bank clients, particularly traders wishing to open letters of credit, as well as individuals.

Youssef told Turkish news agency Anadolu that the auctions have managed to ration the use of the foreign currency reserve, which is now about at about US$15 billion.

An official source at the Commercial International Bank said that the main reason behind the stability of the dollar before the Egyptian pound is the relative halt in importation of Chinese goods, caused by the flower festivals in Beijing starting on 10 January and continuing until 10 February.

The source added that purchase requests for dollars normally level off during this time of year, which also coincides with the Coptic holiday season.

Edited translation from Al-Masry Al-Youm