Egyptian Pound Steady On Official Market, Weaker On Black Market

The Egyptian pound held steady at a central bank dollar sale on Sunday but weakened on the unofficial market.

The bank offered $40 million and said it had sold $37.8 million at a cut-off price of 7.1401 pounds to the dollar, unchanged from its sale on Thursday.

The rates at which banks are allowed to trade dollars are determined by the results of central bank sales, giving the bank effective control over official exchange rates.

In the unofficial market, the pound was trading at 7.80 to the dollar, one trader said, weaker than Thursday’s rate of 7.78 pounds.

The pound began weakening on the black market last week after nearly two weeks of holding steady, traders said.

It was not clear what caused the weakening. One trader said he thought it was due to an increased demand for dollars as people sought to settle debts and deals before the end of the year.

The central bank last month pledged to eliminate the black market in the Egyptian pound after volatility resulting from a surge in commercial demand for dollars and concerns that plans to repay a deposit from Qatar would create a shortage.

A central bank official said on Nov. 28 that Egypt had paid back the $2.5 billion Qatari deposit.

Last month, before the bank’s pledge, the pound was trading at up to 7.75 pounds per dollar on the black market.

Source: Reuters