Egypt’s pound steady at CBE auction, sharply weakens in black market

CAIRO: The Central Bank of Egypt (CBE) kept the pound steady at 7.73 per dollar in a foreign exchange (FX) auction Thursday, unchanged from last sale, the bank posted on its website.

The dollar was sold at banks at 7.83 EGP on Thursday, while it was sold at 7.89 EGP at exchange bureau.

Meanwhile, the dollar was changing hands at 8.17 EGP in the black market market, a sign of a more active black market after months of recession, a trader told The Cairo Post Thursday.

“The bank offered $40 million and sold 37.6 million at a cut-off price of 7.73 EGP per dollar,” the central bank said Thursday.

Statements by Investment Minister Ashraf Salman at the Euromoney Egypt conference on Monday, that the “pound depreciation is not a choice,” citing global economic recession that created higher demand on the hard currency, leading the pound fall against the dollar in the black market on speculation of a third devaluation in 2015, experts and traders told The Cairo Post.

Earlier in July, the CBE allowed the local currency to weaken in two consecutive depreciations in less than a week each by 10 piasters, after holding it steady at 7.53 per dollar for five straight months.

The last move dragged the pound to its lowest level since the CBE started FX auctions in December 2012.

Egypt’s central bank usually holds FX auctions on Sunday, Tuesday and Thursday every week. Such auctions determine the rates at which banks can sell the dollar to clients.

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