The Egyptian pound dropped again against the dollar on the black market on 21 July 2016, extending its recent decline despite central bank efforts to close the gap between demand and supply in the dollar-starved economy. Egypt, which relies heavily on imports, is facing a shortage in foreign currency inflows after a 2011 uprising drove tourists and foreign investors away, causing the country's reserves to tumble to $16.56 billion from $36 billion. A black market for dollars has sucked up liquidity from the banking system while the central bank kept the pound artificially strong and rationed dollars through weekly auctions, putting a strain on foreign reserves. (Photo by Fayed El-Geziry /NurPhoto via Getty Images)
Average yields on Egypt’s three-year and seven-year treasury bonds rose at an auction on Monday, central bank data showed.
The average yield on three-year bonds was 15.897 percent, compared with 15.542 percent at the last auction on Dec. 25. The average seven-year bond yield rose to 15.785 percent, from 15.554 percent.
Egypt has raised its key interest rates by 700 basis points in total since November 2016 when it floated the pound currency to secure a $12 billion International Monetary Fund loan aimed at reviving its economy.
The sharp hikes in interest rates have encouraged investors to buy Egypt’s debt.
