Egyptian pound strengthens, stock exchange plummets

CAIRO – Reuters

The Egyptian pound strengthened at a central bank sale of foreign exchange, while stock market fell by 2.5 percent. REUTERS photo

The Egyptian pound strengthened at a central bank sale of foreign exchange today, hours after violence broke out between supporters of deposed President Mohamed Mursi and the military, a banker said.

The central bank sold $37.6 million to banks, with the cut-off price at 7.0097 pounds to the dollar compared to 7.0184 pounds at July 6 sale, the banker said.

The banker had predicted the 87 basis point fall before banks submitted their bids on Monday morning.

On the black market, the pound strengthened as well, with one dealer offering to sell dollars for 7.25 pounds and buy dollars for 7.20 pounds, compared to 7.35 and 7.30 on Friday.

The central bank introduced the currency sales, held three times a week, at the end of December to help stave off a currency crisis and thwart a run on the pound.

Since then, the bank has allowed the currency to lose 12 percent of its value on the official market.

Stock exchange falls

Egypt’s stock market also reponsed political crisis by falling sharply in the opening minutes of trade.The main index was down 2.5 percent. It surged 7.3 percent July 4 after the ouster of president raised hopes for the installation of a new government that could address economic issues, but has dropped since then.