Egypt’s pound stable officially, stronger on parallel market

CAIRO: The Egyptian pound held steady at 7.53 per U.S. dollar at a regular Central Bank foreign exchange auction Wednesday, but strengthened on the black market.

The pound dropped against the dollar on the parallel market as it was changing hands at 7.62 EGP per dollar, a very close price to 7.63 per dollar at the official market, a dealer told The Cairo Post.

After its clampdown against the black market, the Central Bank of Egypt (CBE) allowed the pound to hold steady against the dollar over the past two months after 10 consecutive depreciations starting Jan. 18.

“The bank offered $40 million and sold $38.4 million at a cutoff price of 7.53 EGP per dollar,” the CBE posted on its website Wednesday. It remains the lowest level Egypt’s central bank had allowed the local currency to reach since auctions began in December 2012.

Banking expert Khaled Ateya told The Cairo Post that the black currency market witnessed a sharp decline in volumes due to the central bank’s decision to depreciate the pound in the official market and the ceiling imposed on dollar-denominated deposits in banks.

A $10,000 daily cap for cash deposits in hard currency for both individuals and companies, with a maximum of $50,000 monthly was part of the CBE measures against the black market in February.

“This ceiling on deposits has deprived those exchanging their dollars outside the official market from a place to deposit their cash,” said Ateya.

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