Egyptian pound steady at dollar sale

Egypt’s central bank kept the pound steady at a dollar sale on Sunday, as it sold $37.5 million at a cut-off price of 7.7301 pounds per U.S. currency.

Traders also said the pound was relatively unchanged on the parallel market.

The official cut-off price was unchanged from Thursday’s dollar sale, and two traders said the dollar was changing hands at 8.145/17 to the dollar in the parallel market, relatively unchanged from Thursday’s rate of 8.15/17.

Egypt has sought to tame a once-thriving currency black market by imposing a cap on dollar-denominated bank deposits among other measures.

In January the central bank allowed banks to exchange currency at up to 0.10 pound above or below the official rate, with currency exchange bureaux allowed to trade at 0.15 pound above or below the official rate.

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

Allowing the currency to weaken in a controlled way could boost Egypt’s exports and attract further investment, but it would also increase an already large bill for imports of fuel and food staples.