The Central Bank of Egypt (CBE) stabilised the US dollar exchange rate against the Egyptian pound at EGP 8.78 in its tender on Tuesday. The market is still waiting for any hint from the CBE to predict whether it will devalue the pound again or not. The banks will sell US dollars to their customers at EGP 8.88. Through the tender, the CBE sold about $116m to banks operating in the local market. According to an official in a private bank, the CBE directed banks to allocate the foreign currency for food imports, mainly fish, poultry, and baby formula. Daily News Egypt has learned that a number of banks did not get any US dollars from the tender since they did not have any requests related to importing commodities. Other banks received very limited amounts of the foreign currency. The CBE had asked the banks to present a report about their foreign currency requests, especially those related to the import of iron, meat, and medication. The market had expected that the CBE will further devalue the Egyptian pound after several statements made by CBE Governor Tarek Amer indicating that the bank will reduce the value of the pound soon. The CBE devalued the Egyptian pound on 14 March by 112 piastres, recording EGP 8.85 per US dollar. This value was lifted by 7 piastres the next day to settle at EGP 8.78 against the US dollar. Retail foreign exchange trading on the informal market has increased significantly, which has led to the US dollar registering EGP 13. Many currency traders said that the US dollar had been traded at much higher prices on the informal market. Banks operating in the local market obtained about $26.8bn from the CBE to finance the import of basic commodities from 30 December 2012 until 19 July 2016, according to a survey conducted by Daily News Egypt. According to a recent report issued by Bloomberg, the gap between the US dollar price on the formal and informal markets reached about 47.5%. Bloomberg added that the price of the Egyptian pound fell by 124.6% since 2011 when US dollar registered EGP 5.83. It now registers EGP 13 on the informal market, considered the lowest in history.
