Egypt CB sells off $38.8 mn at Monday forex auction

Reuters , Monday 3 Jun 2013

In effort to shore up local currency, Central Bank of Egypt sells $38.8 million to local banks – at LE6.9753 to the dollar – at Monday foreign currency auction

The Central Bank of Egypt (CBE) sold $38.8 million to Egyptian banks at a Monday foreign exchange auction, with the cut-off price remaining almost the same at LE6.9753 to the dollar.

The cut-off price at an earlier auction last Thursday had been set at LE6.9738.

Over the last two weeks, the CBE has succeeded in slowing the Egyptian pound's decline vis-a-vis the US dollar.

Currency dealers say the central bank appears reluctant to allow the local currency to fall below the psychologically important LE7-to-the-dollar mark.

On the black market, one dealer offered to buy dollars for LE7.35 on Monday, while selling the greenback at LE7.40.

The CBE began holding foreign currency auctions late last December in an effort to stave off a looming currency crisis and thwart a possible run on the Egyptian pound.

Since then, it has allowed the local currency to weaken by more than 11 percent against its US counterpart on the official market.

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