Egypt Independent

Egyptian banks have attracted US$3 bln since currency float – CBE official



Egyptian banks have attracted some US$3 billion since Egypt took the dramatic step of floating its pound earlier this month, central bank sub-governor Tarek Fayed said on Monday.

The central bank abandoned its currency peg of 8.8 pounds to the US dollar on November 3 in a move it hopes will unlock foreign currency inflows and end a black market for dollars.
 
Fayed told a banking conference in Cairo the flotation had helped foreign currency stream back into the banking system.
 
"The central bank's decisions could not have been delayed more than this and the results over the past two to three weeks were positive," Fayed told a banking conference in Cairo.
 
"We have seen during this period how the banks were able to attract large dollar resources during the past period, amounting to around US$3 billion over the past two weeks."
 
Egypt's currency peg and a decline in foreign investment after the 2011 uprising had drained the central bank's foreign reserves and forced it to ration dollars and impose capital controls before the flotation.
 
The restrictions had pushed the currency trade largely into the black market, where the pound slid to a low of about 18 to the dollar in the weeks before the flotation.
 
The pound has depreciated at the banks since the flotation, reaching 17.30 to 17.95 to the dollar on Monday.
 
That has encouraged more Egyptians to sell their dollars at the bank or remit their earnings through the banking system – money which the banks have in turn sold to clients they had previously been forced to turn away.
 
Akef El Maghraby, the vice chairman of Banque Misr, told the conference that the state bank alone had bought US$400 million since the flotation.
 
Central Bank Governor Tarek Amer said in comments published in a local newspaper last week that Egypt's banks had attracted about $1.4 billion in the first six days in which lenders began operating under the newly liberalised exchange rate.