Pound hits record low

Pound hits record low

On

Tue, 08/01/2013 - 16:29

The Egyptian pound hit a record low on Tuesday after weakening again at a Central Bank US 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 US$60 million at the auction — the same amount it had offered.

Sharif Alawi, vice president of the National Bank of Egypt, told Al-Masry Al-Youm on Monday that there was a dollar crisis in the banking industry due to the pound’s slipping value, but said he did not think the shortage would reach the point of “tragedy.”

He attributed part of the dollars’ recent rise to panic and rumors spread via text messages to citizens, which said that the banking system is no longer safe.

But there is far from a severe shortage, he said. Ahly Bank, according to Alawi, did not even need to participate in the Central Bank’s dollar auction, because their stores were enough to meet demand.

He did not venture to guess what the exhange rate would look like in the near future, but said he wasn’t worried about a steep fall for the pound.

“No one can predict, and talk about expectations is unscientific, because the price is determined by supply and demand forces, and as long as there are flows of dollar does not matter where prices go, which fluctuate and change from moment to another on the screen,” he said.