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Egyptian pound steady at forex auction, eases on black market

Egypt's central bank kept the pound steady at 7.53 to the dollar at a foreign exchange auction on Wednesday while the currency weakened on the black market.

The central bank has kept the official exchange rate steady for more than two months since letting the pound weaken at the beginning of 2015. This step and other measures have helped to reduce black market trading significantly.

The bank said it had offered $40 million at auction on Wednesday and sold $38.4 million at a cut-off price of LE7.5301 per dollar, unchanged from its last auction on Monday.

The rates at which banks are allowed to trade dollars are determined by the results of official auctions. This gives the central bank effective control over exchange rates.

A trader in the parallel market said the pound was trading at LE7.70  to the dollar on Wednesday, weaker than the LE7.66/67 after the last auction on Monday.

Black market traders say volumes have fallen sharply since the central bank's drive to stamp out their transactions, including the introduction of a cap in February on the amount of dollars that can be deposited in banks. 

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