Egypt Central Bank Floats Pound

CAIRO, Nov 3, (APP - UrduPoint / Pakistan Point News - 03rd Nov, 2016 ) - Egypt floated the country's pound Thursday as part of a raft of reforms, after a Dollar crunch and exorbitant black market trade threatened to grind some imports to a halt.

The government of President Abdel Fattah al-Sisi is rolling out an austerity programme and seeking billions in support from abroad in order to meet conditions for a $12 billion loan from the International Monetary Fund.

Floating the pound had long been among a list of measures demanded by investors and international creditors. Thursday's decision by the Egyptian Central Bank came as a surprise, after officials had said they would only consider floating it once foreign reserves reached $25 billion, up from September's $19.

6 billion.

The bank said in a statement it had moved to a "liberalised exchange rate... to create an environment for a reliable and sustainable supply of foreign currency." Egypt has struggled to boost its foreign Currency reserves in the political and economic turmoil following the January 2011 uprising that toppled former ruler Hosni Mubarak.

The central bank's move follows comments last week from IMF chief Christine Lagarde claiming Egypt was undergoing a currency "crisis" and suggesting a quick devaluation to tackle a widening gap between the official and black market rates.

Following Thursday's announcement, the dollar was trading on official markets at between 13.5 and 14 Egyptian Pounds, according to several banks contacted by AFP.