The Egyptian pound has lost 10 percent of its value against the dollar in the last six months, with its slide especially sharp in September, financial sources said Sunday.
The pound dropped from 3.48 to the dollar in April to 3.62 at the end of August before sliding to 3.87 on October 1, according to exchange bureau rates quoted by the EFG-Hermes financial house.
The Egyptian currency has traditionally been pegged to the greenback at 3.4 to the dollar.
The decline translates into a depreciation of 10.07 percent over six months, and 6.4 percent in September alone, the figures revealed.
The currency's depreciation is less drastic according to the rate set in the state-run banks.
It declined from 3.44 pounds to the dollar in April to 3.55 at the end of August, then dropped to 3.54 at the end of September, which amounts to a depreciation of around three percent in six months.
By letting the pound slide, the Egyptian government is seeking to give flexibility to the market to ease a year-long liquidity crisis, an EFG-Hermes analyst told AFP in August.
The decline of the Egyptian currency boosts exports, which rose to $1.1 billion in the first quarter of 2000 compared to $800 million in the first quarter of the previous year.
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
© 2000 Mena Report (www.menareport.com)