Egypt's pound held steady at 7.53 per dollar at Wednesday's central bank auction, remaining unchanged for the first time since the bank began allowing the pound to weaken on January 18. The bank offered 40 million dollars and sold 38.5 million at a cut-off price of 7.5301 pounds per dollar, the central bank said, the same price at the previous sale on Monday.
The central bank has let the official pound exchange rate weaken steadily since January 18, as authorities tried to wipe out the black market as part of economic reforms designed to reinforce a nascent recovery and burnish the country's image ahead of an investment conference in mid-March. The move sent the pound to 7.53 per pound on Monday, the weakest level it has been allowed to reach since the auctions began in December 2012.
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 in the pound, though. A trader on the unofficial market said the pound was changing hands at 7.95 pounds per dollar, down from the rate of 8.00 quoted a day earlier. Egypt's central bank last week gave banks permission to widen the band around the official rate at which they can trade dollars, to 10 piastres about or below the official rate from 3 piastres, in a bid to stamp out the black market.