There has been a lot going on on the Egyptian political front, which no doubt affects the exchange rate and the demand for dollars. I have avoided discussing the political side in order to limit the scope of postings. Obviously if President Morsi can come to a stable agreement with the opposition or if the army ends up stepping in again that will affect the FX situation. But for now...
Ahram Online: Eyptian pound falls at 16th currency auction
A short story but it contains two interesting points
- "The auction saw USD 48.7 million sold to local banks, which was less than the USD 50 million it had initially offered."
- "The bank decided two weeks ago to holding three auctions per week, instead of daily sales."
The original auctions were for USD 75MM five times per week but now they are auctioning USD 50MM three times per week. And according to this article the last auction was not fully subscribed. Perhaps there is more confidence that an all out run on the pound can be avoided.
Financial Times: Post-Arab Spring: Egypt in four charts
Two interesting graphs for those tracking the central banks attempt to engineer an orderly devaluation
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