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Egypt’s currency drops to new low against the dollar

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Cairo , July 06: The Egyptian pound has fallen to a new low against the US dollar, the second such drop in days, the country’s central bank said, in a move that could help boost much-needed foreign investment.

The central bank set a cutoff rate of 7.73 Egyptian pounds per dollar in an auction that sold $39.6 million on Sunday, compared to a previous low of 7.63 on Thursday. Before that, the pound had held at 7.53 since February.

The new rate was the lowest level since the Egyptian government introduced an auction system in December 2012 aimed at regulating the pound’s devaluation.

“It’s welcome to have, within the current context, a weaker pound because the economy is shifting toward a growth mode so one of the key ways to push this growth forward is through foreign exchange,” said Mohamed Abu Basha, an economist at regional investment giant EFG Hermes.

Investors and economists see the currency as overvalued and the central bank had allowed the pound to slide somewhat before a major investor summit in March.

The central bank has also allowed commercial banks a wider margin for selling and buying dollars since January, at 0.10 pounds above or below the official rate.

Egypt’s government is trying to send the message that the country is open for business, after struggling since the 2011 uprising that ousted autocrat Hosni Mubarak.

It has launched a series of ambitious mega-projects and pushed through a host of tough measures, including slashing fuel subsidies and amending the property tax law.