Egypt’s crackdown on dollar black market cripples importers

Egypt’s central bank has recently begun a crackdown on the currency black market, yet financial experts believed that such a campaign has caused troubles for importers due to the lack of US dollars from the banking sector.

The central bank has now barred monthly dollar deposits at 50, 000, while at the same time allowed the Egyptian pound to depreciate by over six percent.

These moves have helped enervate the currency black market. However, investors and importers still want more to be done.

“The CBE (central bank of Egypt) move is normal as any central bank wouldn’t like to have two prices for the dollar in the trading market, but it came at a time when there is shortage of the dollars provided by the bank as alternative,” said Mohamed Farid, head of Dcode Economic and Financial Consulting Company and former adviser to finance minister.

The financial expert explained that the CBE might have limited the dollar trade outside the banking sector, but the issue is that the dollar resources are too limited to make up for the shortage.