Egypt allows pound to weaken to new low of 7.49 per dollar

Reuters , Thursday 29 Jan 2015

The bank offered 40 million dollars and sold 38.4 million at a cut-off price of 7.4901 pounds per dollar, the central bank said

The Central Bank of Egypt
The Central Bank of Egypt's headquarters in downtown Cairo (Photo: Reuters)

Egypt's pound weakened to 7.49 per dollar, from 7.46 at yesterday's sale, at a central bank auction on Thursday, the weakest level it has been allowed to reach since auctions began in December 2012.

The bank offered 40 million dollars and sold 38.4 million at a cut-off price of 7.4901 pounds per dollar, the central bank said.

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, though there remains an active black market in the pound.

The pound was trading at 7.83 to the dollar on the black market shortly after the central bank's auction on Thursday, according to one trader, the same level as was quoted yesterday.

Expectations that the bank will devalue have grown since it announced a surprise 50-basis-point cut in benchmark interest rates earlier this month. The bank said plummeting global oil prices had eased the inflation outlook.

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