Egyptian banks trade currency without central bank restriction
Restrictions were lifted to encourage liberal trade of currency and end shortageEgypt's Central Bank last Sunday abandoned its control over the Egyptian pound giving room for commercial banks to trade currency freely to end currency shortage and attract foreign inflows. This is the first time commercial banks will be trading currency without restrictions from Egypt's central bank. After removing restrictions last Sunday, local lenders traded on interbank bank market registering a total volume of $15.8 million in three hours; quoting 16.55 pound against the dollar which was the lowest quoted compared with 16 and 8.88 quoted by Commercial International bank before restrictions were lifted. Reacting to this development, Hany Farahat, Senior Economist at CI Capital said, "the market is currently undergoing a phase of price discovery, and it is positive that the central bank said it would not to intervene during that initial phase." Since the uprising in 2011, Egypt's forex market has been experiencing turbulence. The current gesture by the central bank will toughen the forex market in the short term.