Egypt pound hits record low under new currency regime
CAIRO (REUTERS) - The Egyptian pound hit a record low on Sunday after the central bank imposed a new currency regime to try and stem a deepening economic crisis that presents a further challenge for President Mohamed Mursi.
The currency adjustment, announced on Saturday, includes regular foreign currency auctions and appeared to signal an orderly devaluation to protect foreign reserves, according to bankers, after the central bank spent more than US$20 billion (S$24.5 billion) over the past two years to defend the pound.
It came after political turmoil in recent weeks over a new constitution had sent worried Egyptians scrambling to sell local currency. The central bank said on Saturday that foreign reserves were now at a critical level and could barely cover three months of imports.
The currency crisis underlines the scale of the economic challenge facing President Mursi, who has been grappling with the fall-out of a political crisis ignited by his move to drive through a constitution written by his Islamist allies.