Egypt's pound remained unchanged at 8.85 against the US dollar after an exceptional foreign currency auction held by the country's central bank on Tuesday, one day following a sharp devaluation of the local currency.

The Central Bank of Egypt (CBE) announced that it has sold $198.3 million to local banks today  - out of $200 million it offered at a cut-off price of 8.85 against the dollar.

The CBE also said in a statement on Tuesday it would offer $1.5 billion to banks in a special auction on Wednesday to clear the backlog of outstanding debts incurred by importers.

The bank has announced on Monday it would be adopting a "more flexible exchange rate" policy as it lowered the value of the pound fall by 14 percent - from EGP 7.73 per dollar.

The CBE sold $198 million at a special auction on Monday at a new price of 8.85. 

The two-pronged move was welcomed by economists, bankers, and the Federation of Egyptian Industries as a necessary step towards addressing a foreign currency shortage that has stifled business activity and hampered growth, though some wondered where the funds to sustain the new policy were coming from.

"If there were new deals regarding external sources of funding the Central Bank would have made it known," said Omar El -Shenety, managing director at the Multiples Group regional investment bank.

Instead, the CBE is likely "recycling" hard currency obtained from commercial banks, as it has done since Governor Tarek Amer took the helm last fall, said El-Shenety.

Egypt's Central Bank has tightly controlled the exchange rate on the pound since the toppling of the Mubarak regime in 2011.

Net International Reserves have fallen to $16.5 billion, down from $36 billion in 2010.