The Central Bank of Egypt (CBE) intervened on Wednesday to support the Egyptian pound against the dollar to reduce demand for the US currency in the official market, as well as the parallel one.
The CBE reduced the price of the dollar against the pound by 20 piasters in banks, bringing the official price to EGP 7.8301. In banks, the price stood at EGP 7.78 for buying and EGP 7.8301 for selling.
In the black market, the dollar fell by about 20 piasters. The price stabilised at EGP 8.30. The market witnessed operations at this price for several hours before they suddenly stopped until Wednesday evening, anticipating further moves from the CBE.
Devaluating the dollar was accompanied by another CBE move to cover 25% of all temporary credit facilities granted by banks to their importing customers during the last period, which they failed to repay as a result of the dollar crisis.
Director General of the Treasury of the Industrial Development and Workers Bank Haitham Abdel Fatah said the devaluation is a positive message to the market as a whole to prove that the market is heading towards a better position and that the CBE is standing on concrete ground. “It will have strong impact on the black exchange market,” he said.
The CBE’s 25% coverage of the credit facilitation, offered by banks to their importer clients, represents a significant step. It reduces difficulties that banks faced in the past to cover these facilitations after importers failed due to the dollar crisis.
In the upcoming days, the whole market is waiting for further moves by CBE to stabilise the market, Abdel Fattah said.
During the CBE’s meeting Tuesday, former CBE governor Hisham Ramez surprised the bank’s board of directors by delegating CBE’s deputy governor Khaled Negm to act as governor until 26 November, which is the expiry date of Ramez’s and the board’s term.
The new CBE governor Tarek Amer will officially take his duties on 27 November, though the day falls on a Friday, the CBE’s official holiday, which delays his entry to 29 November on a Sunday.
