The debt sale scheduled for Monday in Egypt that had been postponed from last week took place, but on a smaller scale than originally anticipated due to low demand. And on Tuesday, the country’s central bank took steps to support the Egyptian pound, but would not specify how much they had devoted to the effort.
According to Reuters, the debt sale previously reported by AdvisorOne had been planned for more than 15 billion Egyptian pounds ($2.53 billion) of short-term debt overall, with 8 billion pounds of that in 91-day bills on the market. However, when the sale actually took place, it was scaled back to only 7 billion pounds, according to an Egyptian banker. Other categories of debt were also reduced because of "subdued demand" in the marketplace. Another dealer said that he had not seen any foreign demand in the market at all.
Meanwhile, the Egyptian pound, which had fallen to its lowest level in 6 years, finally got some support from the country’s central bank, which intervened in the market to boost the currency against the dollar. Hisham Ramirez, the deputy governor of the central bank, was quoted in the report as saying, "We intervened in the market." He would not specify to what extent.
The nation’s stock market is expected to reopen next week, and the action was seen as an advance to restore confidence in the currency before that happens. Economist John Sfakianakis of Banque Saudi Fransi said in a statement that he had not expected the bank to intervene before it had dropped to 6 pounds to the dollar; on Monday, before the intervention, it had closed at 5.952 to the dollar.
"They are doing it earlier than the market had expected, which shows that they are taking seriously the issue of pound depreciation and they will intervene at any cost," he said.
