Egyptian pound steady at dollar sale, stronger in parallel market

Reuters , Sunday 25 Oct 2015

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

Egypt's central bank kept the pound steady at a dollar sale on Sunday, as it sold $37.8 million at a cut-off price of 7.9301 pounds per dollar.

The pound strengthened, however, on the parallel market.

The official cut-off price was unchanged from Thursday's dollar sale but one trader said the dollar changed hands at 8.25 pounds in the parallel market, lower than Thursday's rate of 8.50 pounds to the dollar.

Egypt announced 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 to 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 kept the pound at 7.5301 for five months until July and then allowed it to slide to 7.7301. This month it let it weaken by another 0.20 pounds to 7.9301.

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. 

Short link: