Sunday,19 August, 2018
Current issue | Issue 1232, (5 - 11 February 2015)
Sunday,19 August, 2018
Issue 1232, (5 - 11 February 2015)

Ahram Weekly


Al-Ahram Weekly

New lows for the pound
The official exchange rate of the Egyptian pound continued to fall for the third consecutive week, with the Central Bank of Egypt (CBE) selling dollars to the market in an auction on Tuesday for LE7.59, the lowest rate since the auctions began in December 2012.

The auctions determine the official rate for hard currency used by the banks. The CBE recently decided to allow banks to vary foreign exchange rates within the range of LE0.10 above or below the official rate, as opposed to the previous range of LE0.03.

The aim is to close the gap between the official rate and that of the black market, where the dollar has been trading for around LE7.90.

The PMI fell in January
Egypt’s non-oil private sector output and new orders fell in January for the first time since July 2014, according to the Purchasing Manager Index (PMI), prepared by HSBC.

The index measures the economic health of the manufacturing sector in emerging markets worldwide and is based on five indicators: new orders, inventory levels, production, supplier deliveries and employment.

January’s index was set at 49.3, down from December’s 51.4. The drop marks the first deterioration in operating conditions since July of last year. Readings above 50 signal an improvement in business conditions on the previous month.

According to the index, Egyptian companies reduced their purchasing activities and lowered their workforce numbers during the month.

Meanwhile, suppliers’ delivery times were unchanged and stocks of purchases fell for the first time in six months.

The surveyed companies attributed the drop in output to lower demand and adverse weather conditions, together with reduced export orders due to the economic crisis in Russia.

“The numbers show that Egypt’s recovery remains weak and vulnerable to downside risk,” said Razan Nasser, senior economist at HSBC. “While we continue to expect an upward trajectory for the economy, the gains will come off a low base.”

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