Paralysis hits the black market in Egypt with the collapse in demand for dollars

The Federation of Chambers of Commerce in Egypt revealed that the black foreign exchange market was completely paralyzed in transactions on Thursday evening and Friday morning.

According to a statement, the secretary general of the Federation of Chambers of Commerce in Egypt, Alaa Ezz, indicated that the recent movement of the dollar exchange rate in the official market has caused confusion in the parallel market, in especially with the narrowing of the price gap between the dollar exchange rate in official and parallel markets.

Since March last year, the Central Bank of Egypt has moved vigorously in the practice of control of the foreign exchange market, and in this framework announced a long list of measures which included reducing the price of the Egyptian currency against the US dollar by 73%, in when the US green card exchange rate rose from £15.75 last March to around £27.25 today.

The Federation of Chambers of Commerce has indicated that the foreign exchange black market has completely stopped functioning after the collapse of private sector demand for hard currency, due to successive releases made by government and banks in the last period, which have exceeded $6.8 billion, which coincided with an increase in net liquid reserves of $470, million in December.

He also pointed out that the National Bank and Banque Misr have been offering certificates with an unprecedented annual yield (25%), which has attracted those looking for a safe store of value instead of speculating in dollars, which prompted those who bought dollars on the black market for the purpose of speculation to get rid of them after making losses due to the drop in the Black market price of about £10 in a week.

He pointed out that with the opening of a large number of branches of Banque Misr and the National Bank during the holidays to issue the 25% certificates, those who have speculated on the speed of conversion of the dollar are expected in Sterling to buy the certificates over the holidays at Thursday’s closing price of 27.16 pounds to the dollar, expecting the price to drop to its previous level after the bank holidays next Monday and suffer further losses.

The Secretary General of the Federation of Chambers of Commerce in Egypt underlined that the integration of monetary, financial and commercial policies, and the use by the Central Bank of innovative mechanisms to reduce inflation, and the subsequent releases of production requirements and goods, will have clear effects on the stability of prices in the next short term, which coincides with many government initiatives from the Ministry of Supply and Domestic Trade, the Ministry of Commerce and Industry and the Ministry of Agriculture, with the Federation of Chambers of Commerce and the Federation of Industries for provide low-cost goods in the transition phase.

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