Egypt revokes license of foreign exchange bureau, suspends six others

Sunday 07-08-2016 02:26 PM

A customer counts his U.S. dollar money in a bank in Cairo, Egypt March 10, 2016. E REUTERS/Amr Abdallah Dalsh/

CAIRO, Aug 7 (Aswat Masriya) – The Central Bank of Egypt (CBE) has revoked on Sunday the license of one foreign exchange office and suspended six others after finding them guilty of manipulating and speculating on the prices of foreign currencies.

According to state run news agency MENA, the license of Print Foreign Exchange Bureau has been revoked for repeatedly defying the rules. Four other bureaus were suspended for one year, while two others face a six-month suspension.

The total number of foreign exchange bureaus that have recently had their licenses revoked mounted to 24, while 16 bureaus have been suspended for varying periods.

Earlier in August, the CBE shut down 10 foreign exchange offices for a year after they were found guilty of repeatedly manipulating and speculating on the price of the US dollar in the country’s parallel currency market.

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 in July while banks kept the pound steady at 8.88.

But the pound was strengthened 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.

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

Egyptian President Abdel Fattah al-Sisi said last week that Egyptians would "very soon" be able to purchase U.S. dollars at a unified rate.

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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