For the second day in a row, black market traders sold dollars for more than LE10. Meanwhile, the Central Bank of Egypt held the official exchange rate steady at LE8.78 per dollar in its weekly currency auction. Banks participating in the auction are allowed to re-sell dollars for an additional ten piastres.
After holding the exchange rate steady since November 2015, the CBE allowed the pound to weaken to LE8.85 on March 14 before strengthening it slightly on March 16.
Combined with the infusion of nearly US$2 billion dollars into the banking system that week, the devaluation briefly helped ease black market demand and narrow the gap between prices on the official and parallel exchange rates.
With CBE auctions reduced to their normal level of US$120 million per week and amid speculation that the pound will continue to fall, media reports show the black market exchange rate climbing again.
In a recent interview with talk show host Lamees al-Hadidi, Central Bank Governor Tarek Amer denied there was a currency crisis. “There is merely a crisis in managing the foreign exchange market,” he said, adding that he plans to roll-out a new plan for managing the market in the coming three months.