PHOTO
A man counts his bills at a foreign exchange office in downtown Cairo June 5, 2014. Amr Abdallah Dalsh. Reuters
CAIRO, March 14 (Reuters) - The Egyptian pound traded at its weakest rate in roughly one month on Tuesday as dollar demand for imports ahead of the Ramadan holy month continued to put pressure on bank liquidity.
Banks were selling dollars for between 17.80 and 18.05 pounds, the high end of which marks the weakest rate since Feb. 12, according to Reuters data.
Ramadan, Islam's holy month during which believers fast during daylight hours and eat after dusk and before dawn, will start in May this year. Consumption usually rises during the month and many Egyptian families stock up on various food items and other goods which are purchased from abroad.
Bankers said the holiday importing has in recent weeks put pressure on dollar liquidity at banks, which have raised the price for dollars by about 0.5 pounds in interbank trading in just the last week.
Egypt's central bank abandoned its currency peg of 8.8 pounds to the U.S. dollar on Nov. 3, hoping to unlock currency inflows and stem a black market which diverted hard currency liquidity away from the banking system.
The float more than halved the pound's value to nearly 20 pounds to the dollar by December. It has since rallied, however, dipping below 16 per dollar in February on the back of lower dollar demand for imports before beginning its current slide.
(Reporting by Asma Alsharif and Eric Knecht; Editing by Dominic Evans) ((eric.knecht@thomsonreuters.com; +20 2 2394 8102; Reuters Messaging: eric.knecht.thomsonreuters.com@reuters.net))
Banks were selling dollars for between 17.80 and 18.05 pounds, the high end of which marks the weakest rate since Feb. 12, according to Reuters data.
Ramadan, Islam's holy month during which believers fast during daylight hours and eat after dusk and before dawn, will start in May this year. Consumption usually rises during the month and many Egyptian families stock up on various food items and other goods which are purchased from abroad.
Bankers said the holiday importing has in recent weeks put pressure on dollar liquidity at banks, which have raised the price for dollars by about 0.5 pounds in interbank trading in just the last week.
Egypt's central bank abandoned its currency peg of 8.8 pounds to the U.S. dollar on Nov. 3, hoping to unlock currency inflows and stem a black market which diverted hard currency liquidity away from the banking system.
The float more than halved the pound's value to nearly 20 pounds to the dollar by December. It has since rallied, however, dipping below 16 per dollar in February on the back of lower dollar demand for imports before beginning its current slide.
(Reporting by Asma Alsharif and Eric Knecht; Editing by Dominic Evans) ((eric.knecht@thomsonreuters.com; +20 2 2394 8102; Reuters Messaging: eric.knecht.thomsonreuters.com@reuters.net))
