February 9, 2015 / 10:32 AM / 3 years ago

Egyptian pound steady for fifth straight sale, also on black market

CAIRO, Feb 9 (Reuters) - Egypt’s pound sold at 7.53 per dollar on Monday for the fifth central bank auction in a row and was also steady on the black market.

The central bank had let the official exchange rate weaken since Jan. 18 in an effort to wipe out black market trading, alongside government effort to bolster the economy and burnish Egypt’s image ahead of a major investment conference next month.

The central bank said it offered $40 million for sale on Monday and sold $38.4 million at a cut-off price of 7.5301 pounds per dollar, the same as a sale on Sunday.

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.

There remains an active black market although the pound has strengthened on it and the gap between the official and unofficial exchange rates has narrowed in recent days.

A trader on the unofficial market said the pound was changing hands for 7.75 per dollar on Monday, virtually unchanged from the rate of 7.74 quoted on Sunday.

As well as letting the pound depreciate, the central bank gave banks permission late last month to widen the band around the official rate at which they can trade dollars, and capped dollar deposits in banks. (Reporting By Maggie Fick; editing by John Stonestreet)

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