News

Egyptian Pound Weakens to 9 Against Dollar on Black Market

Egyptian Pound Weakens to 9 Against Dollar on Black Market

An employee counts money at an exchange office in downtown Cairo Credit: Amr Abdallah Dalsh/ Reuters
An employee counts money at an exchange office in downtown Cairo
Credit: Amr Abdallah Dalsh/ Reuters

The Egyptian pound fell to an all-time low of 9 against the dollar in black market trade on Monday from 8.85 the day before, prompting a rush to buy the US currency, Reuters reports.

The fall of the pound comes as import-dependent Egypt faces a foreign currency crisis that has increased the pressure on the government to devalue the pound.

“There is a huge rush over dollars amidst weak supply on the part of exchange bureaus. People want to keep their dollars as the crisis worsens,” one trader told Reuters.

In an effort to alleviate the dollar shortage, which has led to imports of essential goods languishing at customs, Egypt’s central bank on Monday raised the ceiling on foreign currency deposits for exporters to USD 1 million a month, Reuters cited an “as yet unpublished central bank statement” as saying.

However, the financial newspaper Al-Borsa published what seems to be photographs of the statement where the central bank appears to establish three conditions for the raising of the cap on the foreign currency deposits.

They include stipulations that the deposits must be consistent with the value of the imports that the depositor manages, a three-month time limit will be introduced for the depositor to provide receipts confirming it exported goods or services at least of the same value as what was deposited and that companies failing to adhere to the above-mentioned conditions risk being black-listed in the banking sector.

Ever since the 2011 uprising, Egypt has struggled to restore its economic growth as tourists and investors – key sources of foreign currency that Egypt uses to pay for imports – fled the country.

For long, economists have said that Egypt’s central bank needs to devalue the pound while businesses have called for abandoning the dollar caps completely.

The central bank’s decision to raise the dollar cap resulted in companies going back to the black market to acquire dollars and channeling them into the banking system.

That meant that the gap increased between the official exchange rate of 7.73 pounds against the dollar and the black market rate, which on Monday climbed for the first time to 9.

Muslim Brotherhood’s Jordanian Branch Cuts Ties With Egypt Parent Group
Expansion of Sharm El-Sheikh Airport Suspended as Egypt Tourism Wanes

Subscribe to our newsletter


News

More in News

30 Policemen Killed in a Shootout in Egypt’s Western Desert

Egyptian StreetsOctober 20, 2017

Greek Pianist Plays Cavafy Poems as Part of the 2017 Cavafia in Egypt

Maydaa Abo El NadarOctober 20, 2017

With New Power Plants, Egypt’s Solar Investments Surge in 2017

Egyptian StreetsOctober 19, 2017

Egypt Approves First Major Draft Traffic Law in 40 Years

Egyptian StreetsOctober 19, 2017

‘The Show Goes On’: Theatrical Performances Feature Stories of Women in Egypt

Engy AdhamOctober 18, 2017

Climate Change Triggered Social Unrest in Ancient Egypt: Study

Egyptian StreetsOctober 18, 2017

13 Egyptian Businesses Make Forbes’ Top List of Arab Startups

Egyptian StreetsOctober 17, 2017

About 276 Killed in Deadly Truck Bombings in Mogadishu, Somalia

Egyptian StreetsOctober 17, 2017
Egyptian Streets is an independent, young, and grass roots news media organization aimed at providing readers with an alternate depiction of events that occur on Egyptian and Middle Eastern streets, and to establish an engaging social platform for readers to discover and discuss the various issues that impact the region.

© 2017 Egyptian Streets. All Rights Reserved.