Scarce FX supplies drive Egyptians to the black market

11 Feb 2013

(MENAFN) Caused by the ongoing violent political turmoil, a rush for changing Egyptian pounds for hard currencies resulted in a shortage in foreign currency supplies, Reuters reported.

Currency dealers were driven into the streets in search of people with US dollars to sell, creating a new black market.

The currency’s decline was triggered by a political uprising that swept Hosni Mubarak from power in 2011 and it has officially lost 8 percent of its value since December 30.

The decline in foreign reserves drove the central bank to introduce the system of regular US dollar auctions in late December to avoid a full blown currency crisis.

“There are no dollars. Everyone that walks in asks for dollars but supply is scarce,” said one of the dealers.

Egyptians are still worried about holding on their national currency although the central bank managed to stem the slide in official trade last week.

Some dealers tout discreetly outside regulated foreign exchange bureaux and banks in Cairo, illegally offering a better rate to those looking to sell hard currency.

Bonook El Youm, a weekly supplement published by the financial daily Al-Alam Al-Youm, quoted central bank governor Hisham Ramez as saying that he was not worried about the emergence of a black market.

He also expressed his confidence the authorities have the tools to eliminate it completely.