Egyptian Central Bank Modifies Foreign Exchange Rate Mechanism
The Egyptian Central Bank will announce changes to the foreign exchange mechanism on Sunday, local press reports said.
A flexible central rate that changes weekly is expected to be set up according to supply and demand, with banks and foreign exchange companies given a not less than two percent margin to move upwards and downwards around the new price.
The Cairo-based daily Al Ahram said that the new rate was expected to exceed four pounds per dollar, while consultancies had suggested a rate between 4 and 4.1 pounds per dollar, in addition to setting a mechanism that would allow the movement of the central rate on a weekly basis according to supply and demand. The margin between the maximum and minimum rate should change according to market fluctuations.
The daily added that banks would have free rein to buy and sell foreign currencies at the highest possible market rates.
The system will also apply to foreign exchange companies, with the central bank tightening its grip on the market to ensure that no banks or exchange companies move to change the set rate - Albawaba.com