Egypt holds dollar auctions to avert currency crisis

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Egypt holds dollar auctions to avert currency crisis

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Egypt is taking urgent action to avoid a currency crisis and prevent a messy devaluation.

After appealing to people to go easy on exchanging the local pound for US dollars, the central bank is holding auctions to control currency movements.

It says foreign reserves have fallen to a “minimum and critical level”. Figures show they have plunged to 15 billion dollars (11.34 billion euros), covering only three months of imports.

The pound has weakened significantly recently and the credit worthiness of Egypt and its banks has been lowered.

The prime minister now says he expects a resumption of talks in January on an IMF loan that was delayed amid political and social turmoil.

Egyptians are being called upon to ration their foreign currency use and support national industries.

President Mursi has appealed for unity and a focus on rebuilding the country.

His critics argue he is divisive and the newly-approved constitution restricts basic freedoms.