The Central Bank of Egypt (CBE) on 14 March devalued the Egyptian pound by 12.7% to $1=E£8.85 from $1=E£7.73, after the value of the pound came under intense pressure in recent weeks, touching a low of close to $1=E£10 on the black market. The devaluation is intended to squeeze the black market which has flourished as the recent shortage of foreign exchange deprived many importers of hard currency.
The CBE announced on its website the devaluation for the “exceptional auction” of some $200mn offered to banks on that day under ”a more flexible exchange rate regime” than in previous auctions, when smaller amounts of hard currency were offered. This move is intended to “better reflect the underlying forces of supply and demand and, in turn, lead to greater transparency and foreign exchange liquidity through the attraction of greater investments and the correction of assets prices,” the CBE says. The bank earlier in the month offered $500mn also in “an exceptional auction” to help clear imports of strategic goods and basic commodities. (CONTINUED - 649 WORDS)