CAIRO: The Egyptian pound weakened to 9 against the dollar on the black market for the first time ever on Monday from 8.85 a day earlier, as people rushed to buy the U.S. currency, two traders told Reuters.
Egypt, which depends on imports for its food and energy, is facing a foreign currency crisis and authorities are under increasing pressure to devalue the pound.
Three exchange bureaus in downtown Cairo told Reuters on Monday they did not have any dollars available.
"There is a huge rush over dollars amidst weak supply on the part of exchange bureaus. People want to keep their dollars as the crisis worsens," said one trader.
To help relieve a dollar shortage that has seen imports of essential goods piling up at ports, the central bank raised the cap on foreign currency deposits at banks fivefold to $250,000 in January.
The cap, implemented a year ago with a $50,000 limit, aimed to counter the black market for dollars.
Egypt has been starved of foreign currency since an uprising in 2011 ousted autocrat Hosni Mubarak and drove tourists and foreign investors away.
Its foreign currency reserves have tumbled from $36 billion in 2011 to $16.48 billion at the end of January, and the country has been rationing dollars through the weekly dollar auctions to banks, keeping the pound artificially strong.
Comments
Comments are closed for this article.