Egypt fixes customs dollar exchange rate to help importers

Newspaper Title: http://www.reuters.com/

Newspaper Number:

Tuesday - 17 January 2017

Jan 17 Egypt will fix its customs dollar exchange rate and adjust it on a monthly basis to help importers better cope with pricing of their products after the central bank floated its currency in November.

The Finance Ministry fixed the customs exchange rate at 18.5 pounds per dollar until the end of February and said it will review the rate each month, state news agency MENA reported late on Monday.

But importers seemed unimpressed with the move, saying on Tuesday the new fixed price, which is close to the dollar price at the banks, falls short of their expectations.

"They are taking the average rate at the banks and the dollar may weaken during that month. We were expecting the rate to be at 10 pounds per dollar," said Ahmed Shiha, head of the importers division at the Cairo Chamber of Commerce.

Egypt abandoned its peg of 8.8 Egyptian pounds to the U.S. dollar on Nov. 3, floating the currency in a bold move that has since seen it roughly halve in value. The move helped it secure a $12-billion loan program from the International Monetary Fund.

Hany Farahat, an economist at CI Capital, said: "This does not contradict the flotation of the pound. It just helps importers have some kind of visibility on the rate of the dollar they should use in their pricing.