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Egyptian pound stabilises against the dollar at 7.04 despite massive protests

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Experts: the stability of the pound is “temporary” due to bank closures and low demand on banks

Egyptian pound stabilises against the dollar at 7.04 despite massive protests (AFP Photo)

Egyptian pound stabilises against the dollar at 7.04 despite massive protests
(AFP Photo)

The Egyptian pound stabilised against the US dollar at 7.04 for two days on the official market, despite massive anti-government protests on Sunday.

Deputy Treasury Manager at a banking corporation Osama El Manyalawy said that the stabilisation is only temporary, due to the closure of several bank branches and headquarters ahead of demonstrations.

“Stabilisation of the value of the Egyptian pound happens when there’s political stability or when there’s no demand on banks, and the latter is the likely reason,” El Manyalawy said.

“Let’s bare in mind that the performance of most banks is very slow these days due to current political events, most banks are closed as well as the stock exchange, which is not affecting the pound yet,” he explained.

In the days ahead of nationwide protests against President Mohamed Morsi, a number of banks announced the closure of many of their branches, while transferring their operations to other less dangerous locations fearing a negative outcome of the protests.

El Manyalawy explained that citizens are unlikely to be dealing with banks amid protests, or to carry large sums of cash.

Financial expert Magdy Tolba stated that the stabilisation of the Egyptian pound is “barely a positive indicator, especially since banks will resume operations sooner or later, and if protests continue at this rate, the future domestic currency price will be nowhere near the stabilised prices now.”

On the black market, the Egyptian pound has registered 7.6 against the dollar, according to the Central Bank of Egypt.

The Egyptian pound has lost over 15% of its value against the dollar during Morsi’s one year in office, contributing to an 8.2% rise in the annual inflation rate last May, compared from 7.6% in March.


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