PHOTO
CAIRO, Dec 19 (Reuters) - The Egyptian pound weakened on Monday as demand for dollars spiked amid a shortage in banks, bankers told Reuters.
The dollar was being bought for over 19 pounds at most banks, up from around 18.8 earlier in the day. Banks were paying clients up to 18.95 pounds per dollar.
EGP1=
"There are plenty of dollar requests as the year comes to an end and companies are closing their books or seeking to repatriate profits," said one banker.
Banks in Egypt have been raising the price to buy dollars from clients in order to attract inflows and cover requests from other clients seeking to buy dollars.
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 bring back foreign investors who were driven away after a 2011 uprising.
Under the currency peg, dollar supplies were rationed by the central bank, forcing businesses to go to the black market for foreign currency. Bankers say it will take time for those dollars to be absorbed back into the banking system after the float.
The currency peg drained foreign reserves, and analysts estimate the central bank is still around $10-15 billion short of the stock it needs.
(Reporting by Asma Alsharif; Editing by Kevin Liffey) ((asma.alsharif@thomsonreuters.com; +20225783290; Reuters Messaging: asma.alsharif.reuters.com@reuters.net))
The dollar was being bought for over 19 pounds at most banks, up from around 18.8 earlier in the day. Banks were paying clients up to 18.95 pounds per dollar.
"There are plenty of dollar requests as the year comes to an end and companies are closing their books or seeking to repatriate profits," said one banker.
Banks in Egypt have been raising the price to buy dollars from clients in order to attract inflows and cover requests from other clients seeking to buy dollars.
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 bring back foreign investors who were driven away after a 2011 uprising.
Under the currency peg, dollar supplies were rationed by the central bank, forcing businesses to go to the black market for foreign currency. Bankers say it will take time for those dollars to be absorbed back into the banking system after the float.
The currency peg drained foreign reserves, and analysts estimate the central bank is still around $10-15 billion short of the stock it needs.
(Reporting by Asma Alsharif; Editing by Kevin Liffey) ((asma.alsharif@thomsonreuters.com; +20225783290; Reuters Messaging: asma.alsharif.reuters.com@reuters.net))
