Central Bank sells $420M in interbank to cover outstanding commodities
Central Bank of Egypt -YOUM7 (Archive)

CAIRO: The Central Bank of Egypt (CBE) sold Sunday $420 million in the interbank market, to clear all outstanding strategic goods, the bank posted on its website.

In a surprise move, the bank did not offer its typical hard currency auction Sunday, and tended to use the interbank system instead. The CBE usually hold auctions every Sunday, Monday, Wednesday and Thursday.

“The CBE sold today, March 1, 2015 USD 420 million in the interbank market to clear all outstanding strategic goods namely, staple commodities, raw materials and phamaceuticals,” said the CBE.

This is the first time to apply the interbank market since December 2012, Governor of the CBE Hisham Ramez told Reuters Sunday, noting to plans to depend on this mechanism besides the dollar auctions in the coming period.

Over the past three weeks, the Central Bank of Egypt (CBE) allowed the pound to hold steady against the dollar after 10 consecutive depreciations in a fight against the black market since Jan. 18.

As part of its clampdown on the parallel market, the CBE, the auctions of which determine the rates banks sell the dollar to clients, widened the range in which banks can trade dollars last week to 10 piasters above or below the official rate, up from 3 piasters.

It also imposed a $10,000 daily ceiling for cash deposits in hard currency for both individuals and companies.

Some bankers expect the FX auctions and flexible exchange rates may help the central bank combat the active black market and narrow the gap between the official and unofficial prices ahead of the Economic Summit schedule in March.

Egypt hopes the long-awaited economic conference will lure fresh investments worth billions of dollars to boost its limping economy hit by political turmoil since the January 25 Revolution in 2011.

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