Egypt: Morsi tightens foreign currency controls
Travelers to and from Egypt will not be allowed to have more than $10.000 or its equivalent on them. Egyptian President Mohamed Morsi modified the central bank law in order to tighten foreign currency transfers from and to Egypt.
The new presidential decree published in the official newspaper applies to foreigners and Egyptians alike, and includes foreign currencies as well as local.
Furthermore, the president prohibited the entry or exit of foreign currencies via postal consignments and parcels. The original law prohibited only the sending or receiving of Egyptian banknotes (not foreign currencies) via postal consignments and parcels.
The decision was taken to limit demand on dollars as International Reserves significantly decreased since the revolution. Egypt's net International Reserves lost almost 60 per cent of their value between January 2011 and November to reach some $15 billion.
Foreign direct investment and tourism revenue - two of Egypt's main sources of foreign currency - decreased since the revolution.
For the first time in eight years, the US Dollar exchange rate exceeded the 6.1 threshold, trading at 6.15 for the Egyptian pound in December.
Experts expect a further devaluation of the Egyptian currency. Egypt's largest investment bank, EFG-Hermes, expects the dollar to hike to some LE6.60 next year.
The current Central Bank, the Banking Sector and Money Law issued in 2003 does not fix a maximum for money transfers. It only specified that the traveler must inform authorities when the amount of money being transferred exceeds $10,000.
"All travelers can enter or exit with foreign currencies, providing they declare the amount on entry or exit if it exceeds ten thousand US dollars, or their equivalent in foreign currencies," the reads the original law.
- A forced conversion? Top Saudi bank pledges to become fully Islamic after criticism from scholars
- Enjoying the ride: ME regional banks on plane orders 'funding' boom
- The cost of delivery: how to financially prepare yourself for having a baby
- Istanbul Tower: a cruel reminder of what could have been...for Greece
- An unfathomable figure: GCC banking assets set to hit $2 trillion by 2015