Egypt’s central bank will consider floating the country’s currency when foreign reserves are almost double their current level, the bank’s governor said in a televised interview.
Tarek Amer’s comments on al-Qahira Wel-Nas were his clearest signal yet that the central bank has no intention of devaluing the Egyptian pound at present, despite growing analyst predictions that such a move is imminent and probably necessary to draw in new investment. The pound has weakened by 15 percent in black market trading over the past year, while it’s official rate has declined less than 3 percent.
Asked if he was thinking of floating the pound at present, Amer said: “No, not at all.” When reserves “are $25-, $30 billion, we’ll think about it.” Egypt’s net international reserves have stabilized around $16.5 billion over the past few months, halting a steep decline that’s left them more than 50 percent below December 2010 levels.
Amer said the government was not considering selling state- run banks. It would float United Bank of Egypton the Egyptian Exchange, he said, saying it’s a lender “we shouldn’t own.” The bank was formed by the merger of three other failing institutions a decade ago.
The government took the bank “for a specific purpose — to fix it,” he said. With those reforms completed, “we’ll offer it.”