CAIRO:The Egyptian pound was stable at a dollar sale on Tuesday, with the central bank selling $40 million at a cut-off price of 7.9301 pounds per dollar, while the currency weakened on the parallel market.
The official cut-off price was unchanged from Sunday’s dollar sale, but two traders said the dollar changed hands at 8.6 pounds in the parallel market on Tuesday, compared with 8.50 pounds on Sunday.
“There is demand for dollars from gold shops because gold prices dropped so they are seizing the opportunity to buy gold at low prices. The price went down by 7.5 percent in 10 days,” one banker said.
Egypt announced in October that Hesham Ramez would be replaced as central bank governor this month by senior banker Tarek Amer. The move was welcomed by traders, who expect a new approach to the country’s currency crisis.
Cairo has sought to tame a once-thriving currency black market with measures such as a cap on dollar-denominated bank deposits.
The central bank gave permission in January to trade dollars up to 0.10 pounds above or below the official rate, with currency exchange bureaux allowed to trade at 0.15 pounds above or below the official rate.
The central bank kept the pound at 7.5301 for five months until July, then allowed it to slide to 7.7301. In October, it let it weaken by another 0.20 pounds to 7.9301.
Allowing a controlled weakening of the pound could boost exports and attract further investment, but it would also raise Egypt’s already large bill for imported fuel and food staples.