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CBE sells banks $500m to insure strategic imports of food commodities and medicine The CBE conducted the sale at an exchange rate of EGP 7.73 per US dollar
The Central Bank of Egypt (CBE) is to sell $500m to banks operating in the Egyptian market on Sunday, to insure the import of essential food commodities, production materials, and medicine. The CBE conducted the sale at an exchange rate of EGP 7.73 per US dollar. According to the instructions received by the bank on Sunday morning, the list of goods covered by the CBE's sum includes basic food commodities and products, excluding those goods imported by the General Authority for Supply Commodities (GASC). The list of goods includes production equipment, spare parts, intermediary goods, production inputs, raw materials, equipment, devices, medical supplies, vaccines and their chemicals. The CBE asked banks to prepare a list of pending import requests and the names of the applicants through Sunday. The CBE urged the banks to not add any client more than once, even if their requests are in more than one import category. The CBE was scheduled to hold its regular foreign currency auction of $40m on Sunday, but it cancelled the auction and replaced it with an extraordinary one to sell $500m. This move comes after the increasing demand for the dollar and the rise of its exchange on the informal market during the last two weeks. The increasing demand for the dollar caused its price to rise on the informal market, recording a exchange rate of approximately EGP 9.75 for the first time in the Egyptian market. Such a move may decrease the demand for the dollar on the informal market, and thus decrease its price against the Egyptian pound, according to Osama El-Menylawy, first assistant treasury director at a bank operating in the local market. The market needs the CBE to repeat efforts to increase dollar liquidity to ensure that the CBE will not allow the exchange rate to rise again, he said. El-Menylawy believes that the CBE's intervention in the market and its efforts to increase dollar liquidity requires the presence of adequate foreign currency holdings.
