“Depreciation of the Egyptian pound is no longer a matter of choice under the current local and international economic circumstances,” Egyptian Investment Minister Ashraf Salman said during a Euromoney conference held in Cairo on Monday.
“It is best for Egypt’s economy to devalue the pound in light of the looming effect of fluctuation in foreign exchange rates,” he added.
The Minister said that either the pound depreciates or foreign reserves will be sacrificed. He explained that it is important for the reserve not to fall behind this limit, but the final decision belongs to the central bank.
Foreign exchange reserves fell from about $36 billion before the January uprising in 2011 to $18.5 billion last July.
Egypt’s central bank allows banks to trade the dollar at 10 piasters higher or lower than the auction price, while exchange shops can add another 5 piasters to the official price.