Egypt's central bank and banking sector provided US$8.3 billion for imports and investors in recent weeks, Central Bank Governor Tarek Amer told reporters Thursday. He denied that Egypt is struggling to pay for U.S. dollar-priced oil product and liquefied natural gas (LNG) imports. The Arab world's most populous state, which depends on imports for food and energy, has run short of hard currency since a 2011 uprising drove tourists and investors away. Reserves almost halved to $16.4 billion. "The amount of dollars that the central bank and the banking sector injected is $8.3 billion between Oct. 29 to Dec. 12," Amer said, declining to comment on the source of the dollar injection. Egypt, facing mounting pressure to devalue the currency, has been rationing dollars and keeping the currency artificially strong at 7.7301 through weekly dollar auctions, giving priority to imports of essential goods. Earlier this month the central bank said it changed the way it allocated dollars at its regular foreign exchange auctions, which it holds three times a week. Banks were accustomed to receiving a regular quota of foreign exchange at each sale but on Dec. 3 the central bank said it would allocate dollars based on banks' effectiveness in providing foreign currency to the local market. "We have excluded 18 banks from the dollar auctions without giving reasons," Amer said at the press conference, adding that the restrictions were temporary. Amer also said the central bank had provided the petroleum sector with $400 million on Tuesday. Industry sources told Reuters on Wednesday that Egypt is struggling to pay for fuel imports, cancelling purchases and asking suppliers to extend payment terms amid an acute foreign currency crisis. "This is not accurate," Amer said about the report. "We meet all the requirements for the strategic essential goods, including those for the petroleum sector which we provided $400 million for on Tuesday." Source: Reuters
