Egypt weakens pound at auction as reserves keep dwindling

AP News
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Posted: Oct 15, 2015 8:12 AM

CAIRO (AP) — The Egyptian pound has weakened by 10 piasters to 7.93 per dollar Thursday after the central bank reduced its price in an auction by the same amount to 7.83 per dollar.

The National Bank of Egypt and other banks updated their exchange rate charts Thursday after the auction.

Egypt's state-run MENA news agency earlier reported the move at the auction, citing traders.

The central bank effectively controls the value of the domestic currency in regular foreign currency auctions.

The move was expected and urged by many economists who say that propping up the pound had helped deplete Egypt's foreign currency reserves as years of unrest were already taking a heavy toll on Egypt's vital tourism sector and its investment climate.

Egypt's foreign currency reserves fell 9.7 percent in September to $16.3 billion, the third consecutive monthly drop, the central bank said last week.

Egypt has been struggling to maintain its foreign reserves since the 2011 overthrow of longtime autocrat Hosni Mubarak.

The drop in reserves comes despite billions of dollars in aid and loans since 2011 from Gulf Arab nations.