Monday, 16 March 2015 17:46
CAIRO: Egypt’s central bank kept the pound steady at 7.53 pounds to the dollar at a foreign exchange auction on Monday, while it strengthened on the black market.
The bank said it had offered $ 40 million and sold $ 38.7 million at a cut-off price of 7.5301 pounds per dollar, unchanged from its last auction held on Sunday.
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.
One trader said the dollar was selling for 7.63 pounds on the black market on Monday, significantly above Sunday’s rate of 7.67, partly due to positive sentiment after a high-profile investment summit in Sharm el-Sheikh netted billions of dollars in investment deals for Egypt.
Another trader said the dollar was selling for 7.65 pounds.
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.
Copyright Reuters, 2015
