Egypt’s central bank to add fourth weekly dollar auction

SHFAQNA – Egypt’s central bank said on Thursday it would add a fourth weekly auction of $40 million on Sundays from next week, as the government tries to curb a growing currency black market.

Central bank governor Hisham Ramez said last month he would take measures to calm the parallel market in the Egyptian pound , which has grown in recent weeks, but he gave no details or time frame for action.

The bank already offers $40 million each at auctions on Mondays, Wednesdays and Thursdays.

The bank did not give a specific reason for adding the fourth auction.

It sold $38.8 million on Thursday at a cut-off price of 7.1401 pounds per dollar, virtually unchanged since June.

In the unofficial market, the pound was trading at about 7.74 to the dollar, one trader said, compared with about 7.73 on Wednesday.

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.

Egypt’s foreign currency reserves, which are managed by the central bank and are critical for importing wheat and gas, fell to $15.88 billion at the end of November from $16.91 billion the previous month.

Foreign reserves fell sharply after the 2011 uprising that ousted President Hosni Mubarak but had risen again on the back of billions of dollars of Gulf Arab aid that has flooded into Egypt since the army overthrew elected Islamist President Mohamed Mursi last year. (Reporting By Stephen Kalin; Editing by Hugh Lawson)

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