Egyptian pound steady at dollar sale, stronger on parallel market

Reuters , Thursday 22 Oct 2015

Egyptians count money at a currency exchange office in downtown Cairo (Photo: AP)

The Egyptian central bank kept the pound steady at a dollar sale on Thursday, but the currency strengthened on the parallel market after the bank appointed a new governor the previous day.

The central bank sold $37.8 million at a cut-off price of 7.9301 pounds per dollar, unchanged from Tuesday's dollar sale. But one trader on the parallel market said the dollar changed hands at 8.50 pounds to the dollar compared with 8.60 pounds on Tuesday.

Egypt said on Wednesday that central bank governor Hesham Ramez will be replaced by senior banker Tarek Amer, in a move welcomed by traders who expect a new approach that could help ease the country's currency crisis.

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

The central bank gave permission in January to trade dollars up to 0.10 pounds above or below the official rate, with currency exchange bureaux allowed to trade at 0.15 pounds above or below the official rate.

The central bank had kept the pound at 7.5301 for five months until July, when it was allowed to slide to 7.6301. On July 5, the bank let it slip a further 0.10 pounds.

Allowing the pound to weaken in a controlled way could boost exports and attract further investment, but it also raises Egypt's already large bill for imported fuel and food staples. 

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