Egypt suspends 10 foreign exchange bureaus for trading at black market rates

Monday 01-08-2016 09:21 PM

The Central Bank of Egypt devalues the pound against the US dollar on Mar. 14, 2016

CAIRO, Aug 1 (Aswat Masriya) – Egypt’s central bank has shut down on Monday 10 foreign exchange offices for a year after finding them guilty of manipulating and speculating on the prices of foreign currencies, reported state run news agency MENA.

According to MENA, the licenses of 23 of foreign exchange bureaus have been revoked recently. There are 115 foreign exchange bureaus operating in Egypt.

Egypt is facing a dollar shortage with sources of hard currency inflows like tourism and investment slowing down.

Driven by the shortage, rates on the black market reached unprecedented levels of EGP 13 to the dollar last week while banks kept the pound steady at 8.88.

But the pound was strengthened over the past few days of trading to a range between EGP 12.40- 12.70 after the government announced that it is in talks with the International Monetary Fund (IMF) to secure a $12 billion loan.

The IMF mission arrived in Cairo on Saturday for a two-week visit to discuss policies that can help Egypt meet its economic challenges.

Fitch Ratings said that securing the IMF funding deal would be credit positive for Egypt.

The Egyptian president Abdel Fattah al-Sisi said on Monday that Egyptians would "very soon" be able to purchase U.S. dollars at a unified rate, Reuters reported.

Years of political turmoil led to a drop by more than a half of Egypt's foreign reserves in the years following the popular uprising in January 2011, which ended the rule of President Hosni Mubarak. The instability that ensued has driven tourists and investors away.  

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