Posted in Articles on Apr 03, 2016
The foreign currency market in Egypt has witnessed dramatic developments since the start of the 25 January 2011 uprising, the pound began to fall against the dollar and the availability of the foreign currency dropped. In 2012, the CBE started to use the auction mechanism to trade USD with Egyptian banks in order to provide foreign currency liquidity and stabilize the market by increasing the USD offer. This was considered as a step towards free-floating the pound. Dollar prices jumped to its highest records. From a strict legal standpoint, there are no statutory foreign currency controls in Egypt. However, in practice, the Central Bank of Egypt imposed several measures to face the lack of supply and increased demand on foreign currency. The CBE has issued several directives to reduce the gap between exchange rates and prices on the official and black market.