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English news

17-Feb-2016

CBE official denies devaluation talks as EGP continues its slide in parallel market

The Central Bank of Egypt (CBE) is not moving toward devaluing or floating the pound, a central bank official said in remarks published by the state news agency on Tuesday, as demand for dollars in the black market soared. "Thinking in this direction is absolutely untrue," the state news agency quoted the unnamed central bank official as saying, responding to speculation that Egypt might allow the pound to weaken against the dollar.   CBE Governor Tarek Amer told Youm 7 news website that fx bureaus which do not abide by regulations will be subject to closure. Amer's words signal the CBE is relying on its administrative power to control the EGP's slide in the parallel market. Amer also said the recent measures to ease FX deposit limits increased FX deposits in banks by USD3 billion, according to El Watan.    Meanwhile, the USD-EGP continued to weaken in parallel market trading falling to as low as EGP9.15, according to Al Borsa newspaper, from Monday's EGP9.0. Some news reports on an upcoming special FX auction by the CBE did not help calm the market where traders continue to point to an increase in demand by individuals in a hint that the EGP's slide is mainly driven partially by speculative buying. (Reuters, Al Borsa and Mohamed Abu Basha)

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