The gap has widened between Egypt’s official dollar market and the black market one day after the central bank allowed the Egyptian pound to depreciate from EGP 7.14 in the official market.
Market dealers told Mubasher that the dollar exchange rate hit EGP 7.90 today, compared with EGP 7.80 a day earlier.
The Egyptian pound exchange rate continued on Monday to fall against the U.S. dollar for the second day, losing around EGP 0.10 in two days.
Data compiled by Mubasher shows that the EGP reached its lowest level since the foreign currency auction was introduced in December 2012.
The central bank introduced the auctions e to help stave off a currency crisis and thwart a run on the pound.
The central bank said the dollar exchange rate in official auction amounted to EGP 7.2401,
compared with EGP 7.1901 yesterday. Pharos Research said in a report issued Sunday that it expects the EGP to continue to weaken until the 7.5 level before March 2015 and then to 7.75-8.0 before the end of 2015.
It added that the central bank let the EGP depreciate, which will trigger a steep recovery in foreign inflows into equities and bonds and will be critical in ensuring the success of the Economic Summit and success of the Eurobond issue, expected after March 2015.
Photo Credit: Arabianeye-Reuters