Egyptian banks need more foreign currency to compete with black market: Sources

Egypt's latest spate of measures against its foreign currency black market cannot succeed without an immediate increase in the liquidity its foreign currency, economists and traders told Ahram Online.

The Central Bank of Egypt has been devaluing the currency since 18 January in an attempt to narrow the gap between the official rate and the unofficial rate offered illegally in exchange bureaus.

“Adjusting the value of the pound to narrow the gap with the unofficial rate won't be enough to eliminate the currency black market without foreign currency liquidity," Mohamed Abu Basha, Economist at the Cairo-based investment bank EFG-Hermes, told Ahram Online.

In its latest auction on Thursday, the CBE held the pound at 7.53 per dollar, days after allowing banks to trade the pound at as much as 10 piasters above the official rate.