News / Middle East

Egypt's Central Bank Intervenes to Support Currency

Egyptians line up in front of a bank in Cairo, Egypt, Feb 7, 2011
Egyptians line up in front of a bank in Cairo, Egypt, Feb 7, 2011

Egypt's central bank has intervened to support the country's currency, buying pounds after their value fell to a six-year low against the U.S. dollar.

The central bank action on Tuesday was aimed at stabilizing Egypt's stalled economy, which has been battered by two weeks of street protests calling for the ouster of President Hosni Mubarak. The pound had fallen to near six-year low to the dollar on Monday, the day after banks reopened for the first time in a week. The size of the central bank's intervention was not disclosed, but the currency recovered to 5.87 to the dollar.

Some analysts said the central bank may have to continue selling dollars to buy pounds as foreign investors cut their exposure to pound-priced assets.

The country's stock exchange remains closed and is not scheduled to reopen until next Sunday. The value of stocks traded on the exchange fell 16 percent on the last two days it was open before the political turmoil took center stage in Cairo.

There were some signs that the country's economic activity may be stabilizing.  The government said its international borrowing costs have fallen to 6.3 percent, nearly a full percentage point less than at the end of January in the first week of the protests.

On Monday, the government raised $2.2 billion in its first sale of treasury bills since political unrest began sweeping the country.

Brokers and economists say Egyptian banks purchased virtually all of the debt auctioned by the government, with international investors reluctant to enter the Egyptian market given its uncertain political climate.  

Industry experts said the strong demand for the treasury bills from Egyptian banks showed the country's banking sector had enough funds to cover the short-term financial needs of the government. The central bank had hoped to raise up to $2.5 billion through the debt sale, but scaled back the size of the auction to maintain the lower interest rate, the rate of return it offers to buyers of the treasury bills.

Foreign investors previously had been major buyers of Egypt's debt, attracted by its former reputation for political stability and economic growth that was running at six percent a year before the unrest began.

But the country's unemployment rate is more than 20 percent and a French bank is already predicting that the country's economic output will fall this year. The government has acted to support one segment of the population, announcing it would hand its six million civil servants a 15 percent pay raise in April.

Some information for this report was provided by AP, AFP and Reuters.

NEW: Follow our Middle East reports on Twitter
and discuss them on our Facebook page.

You May Like

Anti-Terror Drills Highlight China’s Push Into Central Asia

China, Russia, several central Asian countries wrap up massive anti terrorism military drills in Inner Mongolia More

Erdogan’s First Step: Secure More Power in New Role in Turkey

Erdogan was sworn in as Turkey's first popularly elected president on Thursday; he picked former foreign minister Ahmet Davutoglu as PM More

Pakistan Army Fails to Break Political Deadlock

PM Sharif claims he didn't ask army to defuse crisis; military rejects claim More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Ukraine Battles Pro-Russia Rebel Assaulti
X
Daniel Schearf
August 29, 2014 9:30 PM
After NATO concluded an emergency meeting to discuss the crisis in eastern Ukraine, the country is struggling to contain heavy fighting near the strategic port of Mariupol, on the Azov Sea. Separatist rebels are trying to capture the city, allegedly with Russian military help, and Ukraine's defense forces are digging in. VOA's Daniel Schearf spoke with analysts about what lies ahead for Ukraine.
Video

Video Ukraine Battles Pro-Russia Rebel Assault

After NATO concluded an emergency meeting to discuss the crisis in eastern Ukraine, the country is struggling to contain heavy fighting near the strategic port of Mariupol, on the Azov Sea. Separatist rebels are trying to capture the city, allegedly with Russian military help, and Ukraine's defense forces are digging in. VOA's Daniel Schearf spoke with analysts about what lies ahead for Ukraine.
Video

Video Growing Business Offers Paint with a Twist of Wine

Two New Orleans area women started a small business seven years ago with one thing in mind: to help their neighbors relieve the stress of coping with a hurricane's aftermath. Today their business, which pairs painting and a little bit of wine, has become one of the fastest growing franchises across the U.S. VOA’s June Soh met the entrepreneurs at their newest franchise location in the Washington suburbs.
Video

Video Ebola Vaccine Trials To Begin Next Week

The National Institutes of Health says it is launching early stage trials of a vaccine to prevent the Ebola virus, which has infected or killed thousands of people across West Africa. The World Health Organization says Ebola could infect more than 20,000 people across the region by the time the outbreak is over. The epidemic has health experts and governments scrambling to prevent more people from becoming infected. Zlatica Hoke has more.
Video

Video Asian Bacteria Threatens Florida Orange Trees

Florida's citrus fruit industry is facing a serious threat from a bacteria carried by the Asian insect called psyllid. The widespread infestation again highlights the danger of transferring non-native species to American soil. VOA’s George Putic reports.
Video

Video Aging Will Reduce Economic Growth Worldwide in Coming Decades

The world is getting older, fast. And as more people retire each year, fewer working-age people will be there to replace them. Bond rating agency Moody’s says that will lead to a decline in household savings; reducing global investments - which in turn, will lead to slower economic growth around the world. But experts say it’s not too late to mitigate the economic impact of the world’s aging populations. Mil Arcega has more.
Video

Video Is West Doing Enough to Tackle Islamic State?

U.S. President Barack Obama has ruled out sending ground troops to Iraq to fight militants of the so-called Islamic State, or ISIS, despite officials in Washington describing the extremist group as the biggest threat the United States has faced in years. Henry Ridgwell reports from London on the growing uncertainty over whether the West’s response to ISIS will be enough to defeat the terrorist threat.
Video

Video Coalition to Fight Islamic State Could Reward Assad

The United States along with European and Mideast allies are considering a broader assault against Islamic State fighters who have spread from Syria into Iraq and risk further destabilizing an already troubled region. But as VOA State Department Correspondent Scott Stearns reports, confronting those militants could end up helping the embattled Syrian President Bashar al-Assad.
Video

Video Made in America Socks Get Toehold in Online Fashion Market

Three young entrepreneurs are hoping to revolutionize the high-end sock industry by introducing all-American creations of their own. And they’re doing most of it the old-fashioned way. VOA’s Julie Taboh recently caught up with them to learn what goes into making their one-of-a-kind socks.
Video

Video Americans, Ex-Pats Send Relief Supplies to West Africa

Health organizations from around the world are sending supplies and specialists to the West African countries that are dealing with the worst Ebola outbreak in history. On a smaller scale, ordinary Americans and African expatriates living in the United States are doing the same. VOA's Carol Pearson reports.
Video

Video America's Most Popular Artworks Displayed in Public Places

Public places in cities across America were turned into open-air art galleries in August. Pictures of the nation’s most popular artworks were displayed on billboards, bus shelters, subway platforms and more. The idea behind “Art Everywhere,” a collaborative campaign by five major museums is to allow more people to enjoy art and learn about the country’s culture and history. Faiza Elmasry has more.
Video

Video Chinese Doctors Use 3-D Spinal Implant

A Chinese boy suffering from a debilitating bone disease has become the first patient with a part of his spine created in a three-dimensional printer. Doctors say he will soon regain normal mobility. VOA’s George Putic reports.
Video

Video India’s Leprosy Battle Stymied by Continuing Stigma

Medical advancements in the treatment of leprosy have greatly diminished its impact around the world, largely eliminating the disease from most countries. India made great strides in combating leprosy, but still accounts for a majority of the world’s new cases each year, and the number of newly infected Indians is rising - more than 130,000 recorded last year. Doctors there say the problem has more to do with society than science. Shaikh Azizur Rahman reports from Kolkata.

AppleAndroid