Egyptian pound steady at forex auction, stronger on black market

CAIRO Dec 13 The Egyptian pound held steady at an official foreign currency auction on Sunday and strengthened slightly on the black marketplace.

Egypt, which depends on imported food and energy, is facing a dollar shortage and mounting stress to devalue the pound. The central bank shocked markets when it strengthened the pound on Nov. 11 by 20 piasters against the dollar.

On Sunday it sold $ 39.3 million at a reduce-off cost of 7.7301 pounds to the dollar, unchanged from Thursday, delivering 38.83 % of the amount requested by banks.

The official price is nonetheless far from that on the black market place, which was quoted at 8.55 pounds to the dollar on Sunday by a trader, producing the pound marginally stronger than Thursday’s black market place price of 8.56/57 pounds.

Egypt’s reserves have tumbled from $ 36 billion in 2011 to $ 16.four billion in October, and the nation has been rationing dollars by way of weekly auctions to banks, keeping the pound artificially strong.

On Dec. 3 the central bank said it had changed the way it allocated dollars at its foreign exchange auctions. It supplied fewer banks with dollars but at greater allocations.

Previously, banks in Egypt had been accustomed to receiving a standard quota of dollars at every foreign currency sale. Given that the alterations, some banks have mentioned they have been declined dollars at the typical auctions.

The country has been starved of foreign currency considering that a popular uprising in 2011 ousted autocrat Hosni Mubarak and drove away vacationers and foreign investors.

In February, the central bank imposed capital controls, limiting dollar-denominated deposits to $ 50,000 a month in an try to fight the black industry. The move caused difficulties for importers, which could no longer supply their foreign currency wants. (Reporting by Ahmed Aboulenein Editing by Mark Potter)