Devaluation of the Egyptian pound raises black market activity
The recent decision of Egypt’s Central Bank to devaluate the Egyptian pound by 1.5 percent has pushed the price of the US dollar in local banks from 396 to 410 piasters.
As a result, nearly 80 percent of currency trading has been through currency dealers, reports Al-Musawwar daily. Reportedly, bazaar owners and jewelry dealers in Cairo have begun dealing currency behind a front of official business transactions.
Many critics of the government’s current economic policy regarding the dollar feel that the problem is being mismanaged. As a result of higher currency costs, sellers of US dollars will naturally opt to deal in the black market.
To help alleviate this problem, some believe that imports must be limited to those products which have no local replacement. So far, the government has not heeded any of these warnings.
According to Ali Al-Hariri, Secretary to the Chamber of Commerce's Foreign Exchange Branch, the dollar will inevitably return to the black market if banks and exchange companies buy the dollar at a uniform price. –(MENA Report)
© 2001 Mena Report (www.menareport.com)