Egyptian pound stable at Tuesday's auction, stronger on black market

Reuters , Tuesday 10 May 2016

Egyptian Pound
Egyptian Pound (Photo: Reuters)

The Egyptian pound was stable at a central bank auction on Tuesday but strengthened slightly on the black market.

The central bank sold $119.6 million a 8.78 per dollar, unchanged from the previous week. The pound rose, however, on the black market to 10.85-10.95 compared with 11.05 a week earlier, two traders said without giving any volume figures.

Egypt, which relies heavily on imports, has been facing a dollar shortage since the popular uprising in 2011 drove away tourists and foreign investors, major sources of hard currency.

In an attempt to close the gap between official and black market rates, the central bank devalued to 8.85 pounds a dollar from 7.7301 in March, while announcing a more flexible exchange rate policy. It later set and has kept the pound at 8.78.

The central bank has sought to crack down on black market trading, meeting with bureaus to push them to sell closer to the official rate and revoking some licences over the issue. 

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