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Egypt's central bank to finance USD 1.5bn worth of imports

January 28, 2014

Egypt's central bank intervened in the foreign exchange market through the auctioning of USD 1.5bn to banks in order to finance essentials goods imports, the central bank announced on its website. Banks were required to apply with the amounts of their client's outstanding import needs for staple commodities including: tea, meat, poultry, fish, wheat, oil, milk, beans, lentil, butter, corn; capital goods spare parts; intermediary production components and raw materials; pharmaceutical and vaccine components. The central bank's foreign exchange offer is expected to cover pending import requests at banks up to January 20, 2014. The latest intervention would be the fourth and largest exceptional foreign currency auction since the central bank began its policy of foreign exchange auctioning in December 2012 . Growing demand for foreign currency over the past two months has raised the exchange rate of the USD on the parallel market from EGP 7.1 to EGP 7.4 compared to an official rate of EGP 6.95 . Central bank governor Hisham Ramez signaled in December the bank's intention to intervene in the currency market to curb speculation. Indicating the central bank's determination to curtail speculative bets against the national currency, the central bank suspended operations of 13 foreign exchange bureaus for four to eight week periods for various violations.

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Source: IntelliNews - Weekly Reports

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