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Tuesday, 26 July 2016

EGP hits new record low of EGP 13.10 ahead of weekly CBE auction

EGP hits new historic low ahead of today’s FX auction: The EGP weakened yesterday to yet another historic low, with greenbacks changing hands for EGP 13.10 to the USD 1, FX traders told Reuters, representing a 42% variance from the official rate. Al Borsa put the parallel market rate at EGP 12.90 yesterday, but we were told by a source that regularly transacts that the rate was comfortably above EGP 13. The market is hoarding USD in the expectation that further devaluation of the official rate is imminent, a trader told Al Borsa. The expectation comes ahead of a CBE auction today of USD 120 mn to clear imports of “essential goods.” The CBE did not request a list of specific goods from banks which require clearing this time around, banking sources tell AMAY. This takes us back to a time (back in March) when we were freaking out about Fitch Ratings’ forecasts of exchange rate weakness to over EGP 9 to USD 1.

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