Egypt's Central Bank intervenes to save currency

The Central Bank of Egypt intervened on Tuesday to halt a sharp drop of the Egyptian currency against the U.S. dollar after two weeks of popular unrest across the country.


It was the first time in two years for the central bank to support the country's currency through pumping big quantities of U. S. dollars.


The Egyptian pound rebound steadily on Tuesday closing at 5.870 to the dollar from previous day's close of 5.9615, nearly the lowest level in six years.


Egypt's Central Bank Deputy Governor Hisham Ramez told state- run agency MENA that the bank's intervention strengthened the Egyptian pound against the dollars, adding that the bank is monitoring the currency market closely and is ready to aggressively interfere.


There is no clear report on how much the bank paid in the market, although some traders estimated the size of the intervention was between one billion and 1.6 billion dollars.


At the same time, along with the Egyptian Finance Ministry, the Central Bank of Egypt issued Egyptian treasury bonds worth 13 billion Egyptian pounds.


MENA reported that an unnamed official source explained that the desire by the banks to purchase the bonds reflect confidence in the ability of the Egyptian economy to overcome the current Egyptian crisis.


Ramez said the foreign currency reserves at the central bank hit 36 billion dollars, helping achieve stability in the market.


The Central Bank intervened directly in early 2009 during the world economic crisis. The Governor of the Central Bank of Egypt Farouk el-Okda sent an official message to the International Monetary Fund (IMF) on Friday, saying Egypt is not in need of any monetary or financial assistance to compensate losses during the massive protests as it plans to take several local measures to face the current crisis.
(Source:http://news.xinhuanet.com)