cairo —
As a rising U.S. dollar puts increasing pressure on Egypt’s national currency, several Egyptian banks announced this week that they were offering certificates of deposit with 25% interest rates.
That news, rather than calming economic markets, appears to have added to pressure on the Egyptian pound. It has dropped from a level of around 15 pounds to the dollar earlier this year to what some financial outlets said Wednesday was a record low of 26 to the dollar.
The black market rate can be higher. Efforts by this correspondent to purchase U.S. dollars uncovered at least one black marketeer selling dollars for 33 Egyptian pounds. Egyptian law punishes black market selling of the dollar, and few traders want to go public with their rates.
Egypt’s need to service its high national debt in U.S. dollars is sucking dollars out of the commercial circuit. Egypt imports 65% of its food staples, paid for mostly in U.S. dollars….
