Egyptian pound steady at dollar sale, weaker at parallel market

Reuters , Thursday 29 Oct 2015

An employee counts money at a bank in Cairo September 4, 2014. (Photo: Reuters)

The Egyptian pound was stable at a dollar sale on Thursday, as the central bank sold $37.8 million at a cut-off price of 7.9301 pounds per dollar, but it weakened on the parallel market.

The official cut-off price was unchanged from Tuesday's dollar sale, but one trader said the dollar changed hands at 8.50 pounds in the parallel market on Thursday, compared with 8.30 pounds to the dollar on Tuesday.

Egypt announced last week that the central bank's governor, Hesham Ramez, will be replaced next month by senior banker Tarek Amer. The move was welcomed by traders, who expect a new approach to 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, then allowed it to slide to 7.7301. This month, it let it weaken by another 0.20 pounds to 7.9301.

Allowing a controlled weakening of the pound could boost exports and attract further investment, but it would also raise Egypt's already large bill for imported fuel and food staples.

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