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Egyptian pound steady at auction, stronger at exchange bureaus

Analysts say letting the pound weaken could boost exports and attract further investment

Reuters , Tuesday 21 Jul 2015
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(Photo: Reuters)
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Egypt's central bank kept the Egyptian pound steady at LE7.73 per dollar at a foreign exchange auction on Tuesday after a depreciation earlier this month.

The pound was stronger at currency exchange bureaus.

The central bank said it had offered $40 million and sold $37.5 million at a cut-off price of LE7.7301 per dollar, unchanged from Thursday's rate. Sunday was a public holiday.

The central bank held the pound at LE7.5301 for the past five months until earlier this month, when it allowed it to weaken to LE7.6301. On July 5, the bank let it slide a further LE0.10.

Analysts say letting the pound weaken in a controlled way could boost exports and attract further investment, but it will also raise Egypt's large bill for imported fuel and food staples.

Egypt has sought to tame a once-thriving currency black market with measures such as a cap on dollar-denominated bank deposits.

Two traders at currency exchange bureaus said the pound was changing hands at LE7.85 per dollar on Tuesday, stronger than the rate of 7.875/88 quoted on Thursday, though one trader said it was still trading at LE7.88 on Tuesday.

The central bank gave banks permission in January to trade dollars up to LE0.10 more or less than the official rate, with an extra LE0.05 for currency exchange bureaus.

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