Egyptian pound steady on black market
Cairo, August 21, 2013
The Egyptian pound was stable on the black market on Wednesday while its official price edged higher after the central bank sold foreign currency.
The central bank has been in a stronger position to support the pound since Gulf Arab countries topped up its foreign reserves with $5 billion in deposits after the army deposed Islamist President Mohamed Mursi on July 3.
A crackdown on Mursi's supporters last week, when at least 900 people were killed, stopped the pound strengthening on the black market, whereas the pound's official price, controlled by the bank, has been appreciating slowly since Mursi's overthrow.
Traders say the central bank is ensuring the pound strengthens to give the impression the economy is stable and improving despite the turmoil.
Importers have had to turn increasingly to the black market as the government restricts its limited foreign currency to imports of essential commodities.
The central bank sold $37.6 million and the cut-off price rose to 6.9773 Egyptian pounds per dollar from 6.9780 at the last auction on Monday, the central bank said. The cut-off price on July 3 was 7.0184.
The bank had offered $40 million.
One black market dealer said he was offering to buy dollars for 7.10 Egyptian pounds and sell them for 7.15 pounds.
At Monday's auction the dealer had quoted 7.10/7.13 pounds.
The central bank introduced currency sales, held three times a week, at the end of December to help stave off a currency crisis and thwart a run on the pound.
Since then, the central bank has allowed the currency to lose more than 11 percent of its value on the official market. The currency's value has been under pressure since the 2011 popular uprising chased away tourists and foreign investors. – Reuters