Egypt says for­eign­ers in­vested $500 mil­lion af­ter de­val­u­a­tion

The Pak Banker - - FRONT PAGE -

CAIRO: Egypt's Cen­tral Bank Gover­nor Tarek Amer said on Satur­day that de­valu­ing the Egyp­tian pound had at­tracted for­eign in­vest­ment worth $500 mil­lion in trea­sury bills and that he had pumped $22 bil­lion into the bank­ing sys­tem to clear goods piled at ports. Speak­ing in a pre-recorded in­ter­view aired on a lo­cal talk show late on Satur­day, Amer also said: "There is no cur­rency cri­sis, there is merely a cri­sis in manag­ing the for­eign ex­change mar­ket, and we will roll out an al­ter­na­tive plan for manag­ing the mar­ket in the next three months."

"The de­ci­sion wasn't a de­val­u­a­tion, it was cor­rect­ing the situation and we had planned for it in ad­vance. Its ad­van­tages will out­weigh its dis­ad­van­tages," he added.

Amer said Egypt would pay back a $1 bil­lion debt owed to Qatar in July and also $800 mil­lion to Paris Club coun­tries.

He said dol­lar-de­nom­i­nated "Be­lady" cer­tifi­cates of­fered by the three largest state-owned banks in re­cent weeks to Egyp­tians abroad in a bid to per­suade them to in­vest their dol­lar sav­ings in their home coun­try had seen a very low turnout.

Amer has moved ag­gres­sively in re­cent weeks to bring dol­lars into a bank­ing sys­tem starved of for­eign cur­rency and slow the rapid fall of the Egyp­tian pound on the black mar­ket.

He sur­prised mar­kets this month by re­mov­ing dol­lar de­posit and with­drawal caps, de­valu­ing the cur­rency by 13 per­cent in a sin­gle day, declar­ing a more flex­i­ble ex­change rate and in­ject­ing hun­dreds of millions of dol­lars de­spite crit­i­cally low re­serves. Egypt, which re­lies heav­ily on im­ports, has been fac­ing a dol­lar short­age since a pop­u­lar up­ris­ing in 2011 drove away tourists and for­eign in­vestors, both ma­jor sources of hard cur­rency. The cen­tral bank had been keep­ing the pound ar­ti­fi­cially strong through reg­u­lar auc­tions three times a week. Its re­serves more than halved to $16.5 bil­lion in Fe­bru­ary from around $36 bil­lion in 2011.

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.