Egypt will receive financial deposits pledged by Gulf States leaders at the Egypt Economic Development Conference (EEDC) in the coming few days, the Central Bank of Egypt’s (CBE) governor, Hisham Ramez told MENA Monday.
Gulf countries, namely Saudi Arabia, the UAE, Kuwait and Oman, promised a total of $12.5 billion in aid and investments to Cairo on the first day of the three-day economic summit, which concluded Sunday in Sharm el-Sheikh.
Kuwait, Saudi Arabia, and the United Arab Emirates each pledged $4 billion to Egypt; $1 billion of the Saudi commitment and $2 billion of the Emirati investment are to be deposited in the Central Bank of Egypt. Oman pledged $500 million.
“The deposits will help bolster Egypt’s foreign currency reserves and ease pressure on its local currency,” Ramez added.
Egypt’s foreign reserves rose by $26 million to $15.45 billion at February-end, after noting a sharp slip at the end of 2014, on the back of repaying a $700 million six-month premium on foreign debt owed to the Paris Club in December, a month after baying back a $2.5 billion deposit to Qatar, upon an official request from Doha.
Speaking at the EEDC, Ramez said: “Despite the challenges, the CBE has tackled market concerns seriously… And Egypt was committed to repay its foreign obligations in a timely manner.”
Ramez added that the CBE adopted a more flexible exchange rate and policies, and also imposed some technical rules which eliminated the black market.
The CBE allowed the pound to weaken against the dollar at 10 consecutive depreciations starting Jan. 18, and widened the range in which banks can trade dollars to 10 piasters above or below the official rate, up from 3 piasters, in an effort to control the black market.
It also imposed a $10,000 daily ceiling for cash deposits in hard currency for both individuals and companies.
The Egyptian pound remained stable at 7.53 per U.S. dollar at Central Bank’s foreign exchange regular auctions over the past month. The pound was changing hands between 7.70 to 7.71 EGP per dollar in the parallel market, a very close price to 7.63 per dollar at banks.
“There is no currency black market now in Egypt. Trading in the black market is over,” said Ramez.
