Egypt pound tum­bles on black market as Saudi sus­pends aid

Kuwait Times - - BUSINESS -

Egypt’s pound has tum­bled more than 10 per­cent to un­prece­dented lows in the past week af­ter a sud­den sus­pen­sion of Saudi oil aid raised fears of a deeper po­lit­i­cal rift that could sever the govern­ment’s much-needed fi­nan­cial life­line. Black market traders said they sold dol­lars at 15 pounds on Tues­day, down from 14.20-14.25 a week ear­lier. But sev­eral im­porters told Reuters yes­ter­day they paid 15.20 to 15.68 to se­cure dol­lars amid an acute short­age and plum­met­ing con­fi­dence.

The steep de­pre­ci­a­tion means the gap with the of­fi­cial rate of 8.8 pounds per dol­lar has widened, in­creas­ing pres­sure on Egypt to de­value its cur­rency and end un­cer­tainty that has dis­cour­aged for­eign in­vest­ment. Egypt has strug­gled to earn dol­lars since a 2011 re­volt drove away tourists and for­eign in­vestors. Its ef­forts to de­fend the pound drained re­serves from $36 bil­lion be­fore the up­ris­ing to $19.6 bil­lion at the end of Septem­ber. Egypt has averted cri­sis largely thanks to bil­lions of dol­lars in aid from Gulf Arab al­lies in­clud­ing Saudi Ara­bia since mid2013, when the army over­threw the Mus­lim Brother­hood, a com­mon enemy. — Reuters

Newspapers in English

Newspapers from Kuwait

© PressReader. All rights reserved.