Egypt’s Pound Gains in Black Market After Central Bank Decisionsby
Currency stronger in unregulated trading at 9.684 per dollar
Central bank eased restrictions on dollar deposits this week
The Egyptian pound strengthened on the black market this week, after the central bank eased restrictions on foreign-currency transactions in a bid to limit the damage from an intensifying dollar shortage.
The currency traded at 9.684 per dollar, from 9.763 on Tuesday, according to the average quote from three unregulated dealers in Cairo surveyed by Bloomberg. The official rate is 7.830 per dollar. The pound traded at 9.817 per dollar on Sunday, the lowest since Bloomberg began a weekly black-market survey in April 2013.
The Egyptian central bank on Wednesday removed the withdrawal and deposit cap for companies that import basic commodities, a day after it scrapped limits for individuals. Analysts welcomed a move they predicted would improve liquidity and narrow the gap between the black market and official rates. It marked the fourth time this year that the regulator has relaxed restrictions.
Egypt’s economy has been hampered by a shortage of hard currency, as overseas investors withdrew capital and the tourism industry was hit by the downing of a Russian passenger plane over Sinai. Central bank Governor Tarek Amer, who took office in November, has resisted calls from local investors to devalue the currency out of concern that would stoke inflation.