Egypt to start FX auctions to help conserve foreign reserves

Egypt’s central bank said it was introducing a new auction system for buying and selling U.S. dollars, adding that the country’s foreign exchange reserves had reached “their minimum level.”

The new system will take affect as of Sunday, Dec. 30, and run alongside and not affect the current interbank currency market, the bank said on its website on Saturday. Egypt would continue to meet installments and interest payments on its foreign debt.

The bank called on Egyptians to “rationalize their use” of foreign currency and not to speculate.

Mursi downplays economic crisis

Meanwhile, Egypts President Mohammed Mursi downplayed on Saturday the country’s teetering economy before a newly empowered senate, and insisted that a new constitution that fuelled protests guaranteed equality.

Since the constitution’s acceptance in a two-stage referendum this month following weeks of often violent protests, the Islamist Mursi’s government has sought to downplay fears of a downturn amid a declining Egyptian pound.

In his address to the senate, which the constitution invests with legislative powers until a new parliament is elected in two months, Mursi insisted there had been gains as well as losses in the battered economy.

Morsi said that the number of tourists over the past four months had doubled compared with a six-month period last year.

He also said the Suez Canal recorded two billion dollars in revenue between July and October 2012 – “the largest percentage in a long time.”

“Unfortunately, if it were not for events in which some people violated the peacefulness of politics, this noticeable rise (in tourism) would have continued,” he said of protests such as the one that killed at least eight people in clashes outside the presidential palace on December 5.

The mass rallies that broke out in November after Mursi adopted extensive powers -- later repealed -- have now subsided, but the opposition this week called for further protests against the new constitution.

The opposition, led by the National Salvation Front coalition, sees the charter as a possible tool to introduce strict Islamic sharia law by weakening human rights generally, women’s rights and the independence of the judiciary.

The political crisis has stalled a $4.8 billion IMF loan which analysts expect will come through after a new parliament is elected.