CAIRO (AP) — The Egyptian pound fell to a record low against the dollar Sunday as the central bank stepped into the market to try to stabilize trading and stop an anxious public that has been buying up dollars for fear of an even bigger dive in the local currency, bankers said.
The pound slid more than 3 percent on the first trading day after the central bank introduced a new dollar auction system that bankers said appeared designed to allow a “controlled devaluation” of the Egyptian pound. Many economists consider the pound overvalued and propped up by the government, which has used fast-dwindling foreign currency reserves to keep the value artificially high.
Khaled Abdel-Hamid, from Union National Bank of the UAE in Egypt, said the central bank is now directly involved in trading to stabilize the market and will probably help stop speculation on the currency by panicked buyers.
Egypt is grappling with a crippling deficit and foreign reserves have fallen to $15 billion from $36 billion in 2010, before the uprising that toppled Hosni Mubarak.
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