Egyptian pound steady for sixth straight dollar sale

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 (File photo: Shutterstock)

Egypt sold dollars at 7.53 pounds per dollar on Wednesday for the sixth central bank auction in a row and the pound was also steady 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, alongside government efforts to bolster the economy and burnish Egypt’s image ahead of a major investment conference next month.

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

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 remains an active black market, where the pound initially weakened alongside the bank’s official depreciations. The black market has recently strengthened and then been largely stable since the bank stopped its depreciations last week.

A trader on the unofficial market said the pound was changing hands for 7.75 per dollar on Wednesday, the same as the rate quoted on Monday.

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 capped dollar deposits in banks.

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Last Update: Wednesday, 20 May 2020 KSA 09:44 - GMT 06:44
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