The amount of dollars offered in the daily Forex auctions managed by the Central Bank of Egypt (CBE) slid by 20 per cent in the fifth day of auctions.
The dollar price continued to rise in the auction that took place Sunday, the minimum price paid to buy the $60m offered by the bank was EGP 6.4185 per dollar.
The cut-off price in Thursday’s auction was EGP 6.3860 per dollar, for the $75bn offered.
The recurrent rise in the dollar’s exchange rate reflected on the price of imported goods such as steel, sugar and wheat and risks of triggering an inflationary wave.
The central bank has sold $360m with cut-off prices evolving from EGP 6.2425 to 6.4185 since it began the new currency regime on 30 December, aiming to slow down the depletion rate of the country’s net international reserves (NIR).
The drop in the amount of offered dollars coincided with a slight decrease in foreign reserves at the end of December 2012 as announced by the CBE; the NIR that stood at $15,035 at the end of November lost $21m.
In a press release issued last week the CBE said that the reserve have reached their “minimum and critical” levels, and called upon Egyptians to rationalise their foreign currency use.
Foreign reserves have lost more than $20bn since the 25 January revolution, and the social unrest that followed which deterred tourists and foreign investors and triggered the rapid depletion of the NIR.
Financial analyst at Signet institute, Angus Blair, told Daily News Egypt that the Forex auctions are an efficient tool to slow down the draining of the reserves compared to the “market maker” policy that was used previously by the central bank.