News Column

Egypt : $1.1bn sold by CBE to banks in exceptional auction

May 17, 2014

The Central Bank of Egypt (CBE) held a 5th exceptional auction to sell $1.1bn of its foreign reserves in attempts to support the banking sector as stated by the bank.

Reducing from the CBE s attempts to manage and monitor the foreign exchange market, the monetary authority stated that banks are necessary to apply with the amount of US dollars needed as per their clients import requirements.

Ali Al-Hariry, deputy chairman of the foreign exchange companies division within the Federation of Egyptian Chambers of Commerce said that the decision came in order to meet traders needs, who usually begin importing their goods for Ramadan at this time of the year.

Al-Hariry said, It will notably affect the informal foreign exchange market .

As per to Al-Hariry, the informal price of selling $1 was EGP 7.5 before the decision. Meanwhile, the CBE s official price stands at EGP 7.083.

In January, the CBE sold $1.5bn in a similar exceptional auction, $1.3bn last September, $600m in April and $800m in May 2013.

From December 2012, the Central Bank has been restricting access to US dollars by hosting dollar auctions up to three times a week. The move comes as an attempt to ration the supply of dollars and give priority to staple food imports due to the state s dwindling supply of foreign reserves.

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Source: TendersInfo (India)