Egyptian central bank raises up 500 million dollars in market

Egyptian investors and bankers said today that the Egyptian central bank has succeeded in easing the crisis of the lack of liquidity of dollars in the market by adding at least $500 million in the foreign exchange market since last Sunday.

The head of one of the money-changing offices in Cairo said: "Really starting from yesterday the dollar began to go back to its normal rate about 3.38 in comparison to 3.70 pounds two days ago.

Last month, investors and businessmen complained that they have not been able to receive dollars from banks.

In addition to the brokers who said that the loss of dollars partially relates to the stagnancy that affects dealings in the stock market, where this shortage could alienate foreign investers, fearing from not being able to witdraw their money and that their investments could lose their value.

A banker from Cairo International Barcley Bank said that the situation has improved because the central bank pumped more dollars into the market, adding that for the time being the situation is better, but no one knows whether the situation will remain like this or not.

Continuing his statements, the banker said the central bank has promised to supply the bank with its requirements in light of the existing dollar reserves.

The senior economist in the International Trade Company for Brokery, Mostafa Abd El-Latif, said the central bank has pumped about $2 billion into the market.

The dollar crisis in Egypt started with a reduction in the money-exchange market due to the fall of tourism following the 1997 Luxor incident and escalated by the period in which petroleum prices and transfers from workers abroad fell and the revenues of the Suez Canal went down.

Egypt's reserves of foreign currencies amounted to $18.226 billion in May, falling from $19.92 billion in April and $19.3 billion in May 1998.