Egyptian pound steady for seventh straight dollar sale

Egypt sold dollars at 7.53 pounds per dollar on Thursday

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Egypt sold dollars at 7.53 pounds per dollar on Thursday, the seventh central bank auction this month, as the pound strengthened on the black market.

The bank has let the official exchange rate weaken since Jan. 18 in an effort to wipe out black-market trading, but it has kept the rate steady for nearly two weeks now.

The bank’s moves to pressure the black market come alongside government efforts to bolster the economy and burnish Egypt’s image before a major investment conference next month.

The central bank said it offered $40 million on Thursday and sold $38.4 million at a cut-off price of 7.5301 pounds per dollar, the same level as a sale on Wednesday.

The rates at which banks are allowed to trade dollars are determined by the results of central bank sales, giving the bank effective control over official exchange rates.

There is still an active black market, where the pound initially weakened alongside the bank’s official depreciations.

The black market has stabilized and recently strengthened since the bank stopped its depreciations last week.

A trader on the unofficial market said the pound was changing hands for 7.725 per dollar on Thursday, one trader said. Another quoted 7.71.

Both rates indicate a strengthening since yesterday, when traders said the pound was going for 7.75 per dollar.

As well as letting the pound depreciate, the central bank gave banks permission late last month to widen the band around the official rate at which they can trade dollars and imposed a limit on dollar deposits in banks.

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