The Egyptian pound weakened to a record against the dollar after the central bank held its third auction of the U.S. currency aimed at limiting its availability to conserve dwindling reserves.
The central bank sold $75 million at a cut-off price of 6.3510 pounds to the dollar, according to its data on Bloomberg. The currency fell to an all-time low of 6.3910 to the dollar as of 1:08 p.m. Cairo time, after the auction results were announced, according to prices compiled by Bloomberg.
The North African nation’s central bank started the sales this week in order to guard foreign currency reserves from further depletion after they reached the “minimum and critical level.” Net international reserves have dropped to roughly $15 billion, or about 60 percent below their level prior to the popular uprising that started two years ago. That’s enough to cover about three months of imports, central bank data show.
Each bank has been allowed to bid for as much as $11 million at this week’s auctions. The pound has depreciated about 3 percent since the sales began.
The exchange rate will “never” weaken to 7 pounds, Finance Minister Momtaz el-Saieed said today by phone, calling the current levels “temporary.” Egyptian officials, including President Mohamed Mursi, have said the they expect the local currency will bounce back.
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