Egypt Central Bank Devalues the pound

The Central bank in Egypt has weakened the value of the Egyptian pound against the dollar Sunday for the second time in a week.

The bank said in a statement that it dropped the value from 7,83 to 7,93 pounds per dollar. The central bank controls the value of the domestic currency in regular foreign currency auctions.

This is the weakest the pound has been since the Egyptian government introduced the auction system in December 2012 aimed at regulating devaluation.

The new rate could boost much-needed foreign investment, as investors and economists see the currency as overvalued.

Meanwhile, Egypt’s foreign currency reserves continue to drop. Many economists say propping up the pound was a factor in the depletion of Egypt’s foreign currency reserves. The bank reported that reserves fell 9.7 percent in September to $16.3 billion. Years of unrest since the 2011 overthrow of longtime autocrat Hosni Mubarak were already taking a heavy toll on sources of foreign investments.