Egyptian pound steady on official market

The limit on deposits discourages use of the black market by depriving those who want to exchange dollars outside official channels (File photo: Shutterstock)

Egypt’s central bank kept the pound steady at 7.53 to the dollar at a foreign exchange auction on Wednesday.

The bank said it had offered $40 million and sold $38.4 million at a cut-off price of 7.5301 pounds per dollar, unchanged from its last auction, held on Monday.

The central bank has now kept the official exchange rate steady for more than a month after letting the pound weaken in an effort to wipe out black market trading.

Black market traders said activity had fallen dramatically because of that step and a cap the central bank put in place in
February on the amount of dollars that could be deposited in banks.

The limit on deposits discourages use of the black market by depriving those who want to exchange dollars outside official channels of a place to keep their funds.

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.

Analysts say the central bank may have decided to stabilize the currency to stop it from depreciating too much and because it hopes other measures will have an impact.

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.

SHOW MORE
Last Update: Wednesday, 20 May 2020 KSA 09:46 - GMT 06:46
Top