Egyptian pound at seven year low ahead of vote result

Egyptian pound at seven year low ahead of vote result

Egyptian pound at 7-year low ahead of vote result

Egypt's currency takes a beating, as citizens await the result of the crucial presidential elections.

June 24, 2012 4:25 by Reuters

Egypt’s currency, the pound, weakened to its lowest against the U.S. dollar in more than seven years as the country waited to see if a former military officer or a member of the Muslim Brotherhood would be its next president.

The pound was bid at as low as 6.055 to the dollar, its weakest since Dec. 30, 2004.

“It is definitely because of the uncertainty surrounding the election results,” a currency dealer at a Cairo-based bank said. “There is heavy selling to local customers. I think there is a lot of panic among local customers.”

The election committee is due to announce the result of last weekend’s polarising run-off vote at a news conference at 3 p.m. (1300 GMT).

The Muslim Brotherhood’s Mohamed Morsy says he won the race. If so, it would thrust into power a group which former president Hosni Mubarak spent three decades fighting and which is distrusted by many Egyptians.

A win by his rival, former air force commander Ahmed Shafik, could provoke an angry backlash on the streets, despite his assurances that he also wants an inclusive government.

The cost of insuring Egypt’s debt against default jumped to its highest in three and a half years last week, after allegations of fraud delayed the result of the presidential election.

The dissolution earlier this month of the parliament elected after last year’s overthrow of veteran president Mubarak has also alarmed investors, who fear Egypt will hurtle towards a balance of payments crisis and a currency collapse.