Egypt Independent

Egyptian pound steady on official market, weaker on black market



Egypt's central bank kept the pound steady at LE7.53 to the dollar at a foreign exchange auction on Sunday, while the currency weakened slightly on the black market.

The central bank has kept the official exchange rate steady for more than two months after letting the pound weaken at the start of the year. This and other measures have combined to reduce black market trading dramatically.

The bank said it offered $40 million at auction on Sunday and sold $38.2 million at a cut-off price of LE7.5301 per dollar, unchanged from its last auction on Thursday.

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

A trader in the parallel market said the pound was trading at LE7.67 to the dollar on Sunday, from LE7.66 on Thursday.

Black market traders say volumes have fallen dramatically since the central bank's move against them and since it imposed a cap in February on the amount of dollars that can be deposited in banks.

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