Egypt’s government has launched a radio campaign to encourage Egyptians to stop trading foreign currency on the parallel market and instead rely solely on banks.
The campaign tells listeners that trading at banks will help alleviate the shortage of dollars in the country and reduce inflation.
Last week, Egypt’s central bank moved to float the Egyptian pound and allowed banks the freedom to set individual rates for dollar exchange based on supply and demand.
According to Reuters, however, banks have been holding to their limited supplies of dollars, pushing up the price of the greenback to EGP 16.83.
Prior to Egypt’s move to float the currency, importers relied largely on the parallel market for much-needed foreign currency that became unavailable through official channels as the central bank began implementing strict measures to preserve the country’s foreign reserves.
However, leaders from the Federation of Egyptian Chambers of Commerce called for a boycott of the parallel market last week, after dollars began trading at an all-time high of EGP 18. Following the boycott, the pound strengthened on the parallel market and dollars were being sold for between EGP 12 and 15.
Now that the official dollar rate has risen, Egypt is hoping to re-attract the foreign currency that had been trading on the parallel market back to the country’s banks.
Egypt’s foreign reserves stood at USD 19.592 billion at the end of September.