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Tuesday, 26 January 2021

Egyptian pound stable at Tuesday's auction, stronger on black market

Reuters , Tuesday 7 Jun 2016
Egyptian pound to US dollars (Photo: AP)
Egyptian pound to US dollars (Photo: AP)
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Egypt's central bank kept the pound steady against the dollar at its official foreign currency auction on Tuesday, central bank data showed, and the currency was stronger on the black market.

The central bank sold $119.9 million at a cut-off price of 8.78 pounds per dollar, unchanged from last week.

The central bank has kept the pound artificially strong since it devalued the currency in March to 8.78 per dollar from 7.7301 and announced a more flexible exchange rate policy.

Dollars are rationed through weekly auctions, giving priority for imports of essential goods.

A shortage of dollars in the formal banking system since a 2011 uprising that drove away tourists and foreign investors, key sources of hard currency, has made it difficult for import businesses. Many of them now rely on a black market where they can procure currency for a higher price.

The pound's rate on the black market has grown weaker since the March devaluation, at which time it was roughly in line with the official rate.

Three currency traders cited 10.9 pounds per dollar as the black market rate on Tuesday, without giving any trade volumes, stronger than last week's rate of 11 pounds per dollar.

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