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Egypt

Egypt's currency hits seven-year low

Egypt's pound has continued to tumble, dropping to its lowest level in the last seven years. President Muhammad Morsi said the fall does not worry him, and he expects a return to stability soon.

The pound fell to its lowest level since 2004 Monday, dropping to 6.42 against the dollar in trading compared to 6.36 Sunday, state news agency MENA said.

The drop "does not worry us and we are not afraid," said Morsi late Sunday. "In a few days things will balance out."

"The market will return to stability," the president added.

Political turmoil

Egypt's economy, with its slowed tourism revenue and foreign investment, has been in decline since the January 25 revolution that toppled former dictator Hosni Mubarak in early 2011.

The country's present currency troubles have coincided with recent political turmoil surrounding its president and a controversial new constitution passed last week.

Egyptian pound falls further

Contributing to the fall are the many Egyptians, concerned over the mass protests and street clashes surrounding the political unrest, who have rushed to convert their pounds to dollars.

The run on the banks prompted officials last week to limit how much cash could physically be carried out of the country.

'Critical minimum'

Egypt's central bank on Saturday said its foreign currency reserves, which have dropped from $36 billion (27.3 billion euros) to $15 billion in two years, were at a "critical minimum."

The bank has taken several measures to limit capital outflows, including the introduction of a tax on foreign exchange for individuals and capping daily withdrawals by foreign companies at 30,000 euros.

Prime Minister Hisham Kandil said Sunday the economy was in "a very difficult and fragile" situation, adding that his country would resume negotiations with the International Monetary Fund for a $4.8 billion loan.

dr/jm (AFP, Reuters)

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