Egyptian pound will not float free
The Egyptian government is not planning to let the Egyptian pound float free, despite its sliding value against the dollar, Prime Minister Atef Ebeid was quoted as saying by newspapers on Saturday, January 13.
The pound, which for years was fixed at 3.40 to the dollar, is now selling at 3.77 to the dollar in banks and nearly four pounds in street exchange booths after the government began to let it slide last year.
"The government has no intention whatsoever of either letting the Egyptian pound float completely or fixing it firmly to foreign currencies," Ebeid said.
He said the central bank was regulating the exchange rate according to supply and demand and would intervene if the dollar made an "unjustified or illogical jump," without giving further clarification.
Analysts have said that by letting the pound slide, the Egyptian government is seeking to ease a lengthening liquidity crisis.
President Hosni Mubarak said at the end of April that the country was suffering from a liquidity crisis because of excessive spending on infrastructure projects, state banks' bad loans, a flight of capital and a lack of investment from abroad. —(AFP)
© Agence France Presse 2000
© 2001 Mena Report (www.menareport.com)