Egypt pound steady at dollar sale, weaker at exchange bureaus

CAIRO – Egypt’s central bank kept the pound steady at a dollar sale on Sunday, selling $37.8 million at a cut-off price of 7.7301 pounds per dollar, unchanged from Sunday.

The central bank had kept the pound at 7.5301 for five months until July, when it allowed it to slide to 7.6301. On July 5 the bank let it slip a further 0.10 pounds.

In January, the central bank gave banks permission to trade dollars up to 0.10 pounds above or below the official rate, with currency exchange bureaus allowed to trade at 0.15 pounds above or below the official rate.

In recent weeks, however, the pound has been trading at exchange bureaus well outside the 0.15 band, signalling the return of a parallel market for dollars, though traders say dollar liquidity remains low.

One trader at an exchange bureau said the pound was changing hands at 8.22 pounds per dollar on Sunday while another said it was changing at 8.17 pounds per dollar, higher than Thursday’s 8.17/8.20.

Egypt has sought to tame a once-thriving currency black market with measures such as a cap on dollar-denominated bank deposits.

Allowing the pound to weaken in a controlled way could boost exports and attract investment but it also raises Egypt’s already-large bill for imported fuel and food staples.