Egypt shuts two currency trading firms over black market dealing

Reuters , Tuesday 21 Jun 2016

Egypt's central bank has permanently closed two more exchange companies for selling foreign currency at more than the official rate as it steps up a campaign to crush a flourishing black market, exchange bureau and central bank sources said.

One exchange bureau source said that the central bank has shut down a total of 21 currency trading companies this year out of more than 100 that were active before the crackdown.

It blames them for persistent speculation against the pound.

"The companies were shut down due to repeated violations in the pricing of currencies, among other violations," one central bank official said on Tuesday.

Egypt's central bank does not usually comment officially on matters not directly related to monetary policy.

The central bank devalued the pound by 13 percent in March in an effort to close the gap between the official and parallel rates. But the devaluation and easing restrictions on the transfer and deposit of foreign currency failed to boost dollar liquidity enough to eradicate the black market.

The pound traded at about 11 to the dollar on the parallel market on Tuesday, compared with the official rate of about 8.8.

Egypt's government approved prison sentences for traders selling foreign currency outside the official rate this month. 

Short link: