CBE sells $1.5bn of foreign reserves

Central Bank of Egypt (CBE) Cairo - Arab Today The Central Bank of Egypt (CBE) held a fourth exceptional auction to sell $1.5 Billion of its foreign reserves to boost the banking sector. In a statement the central bank said that banks would be required to designate the amount of US dollars needed as per their clients' import needs. According to the statement, such imports should fall under the categories of basic food commodities, intermediary production components, raw materials, capital goods, spare parts and pharmaceutical components. Experts view the move seeks to limit the authority of exchange companies. The CBE recently closed 19 exchange companies so there is a need of another resource for institutions and companies to access funds. This exceptional auction will help in depreciating the value of US dollar against the Egyptian pound. Last September, CBE sold $1.3 Billion in a similar exceptional auction, as well as $600 Million in an April auction and $800 Million in May. Since December 2012, the central bank has been restricting access to US dollars by hosting dollar auctions up to three times a week. The move is an attempt to ration the supply of dollars and give priority to staple food imports due to the state's dwindling foreign reserves, according to financial experts. Source: BNA