Egypt’s central bank is comfortable with the current level of the Egyptian pound and is not targeting any particular rate for the currency, a sub-governor at the bank said on Wednesday.
The pound has fallen 4.5 percent since the start of the uprising that toppled leader Hosni Mubarak last year and plunged the economy into turmoil. Economists say the drop would have been far deeper if the central bank had not defended the pound's value.
At 0840 GMT, the pound was trading at 6.0920 to the dollar.
“We are comfortable with the current currency valuation,” Nidal Assar, the bank’s sub governor for investment and foreign relations, said at an investment conference in Cairo.
Asked if the bank was targeting a particular currency rate, he said, “No. we don’t target the currency or the (foreign) reserves, as they are related.”
Economists say central bank support for the currency helped push foreign reserves down by more than half to around $15 billion.
Assar said the central bank does intervene in the currency “whenever we feel there is an excessive speculation on the market.”
Reserves stabilized around mid-year when foreign investors had exited most of their Egyptian treasury bill holdings and foreign donors such as Saudi Arabia and Qatar sent funds to support the Egyptian economy.
Fears that the pound could weaken further have made many investors reluctant to return to Egypt despite a more stable political environment since the election of President Mohammed Mursi. Much could depend on whether the government can seal a $4.8 billion loan from the IMF. It has said it aims to reach a deal within two weeks of talks set for the end of this month.