1 January 2013

Egypt: Morsi - Market Will Rebound

Egypt is not concerned about the dollar's recent rise against the Egyptian pound, President Mohamed Morsy said on Monday 31/12/2012.

The market will stabilize within days and funds are being pumped in to balance the market, Morsi said during a meeting with Arab media members.

Morsi said the government has moved towards balancing the market, adding that dollar purchasing on Sunday drove its price up to LE 6.29.

The new mechanism by the CBE involves periodic offers for buying and selling the US dollar with the aim of maintaining the eroding foreign reserves that have reached to a critical low.

The new system, which depends on dollar inter-banking, is a first step towards liberating the pound, Chairman of the Federation of Egyptian Banks.

More than a month of political tumult has cast uncertainty on the government's ability to proceed with spending cuts and taxation increases, unpopular yet necessary measures to obtain a US$4.8 billion loan from the International Monetary Fund.

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