Banks offering dollars lure Egyptians from the dark side

It was only half the amount he requested, but for Ahmed, a textile manufacturer in Egypt, the $168,000 he received from the bank to import yarn was almost a year in the making.

The transaction was the first he had done since the central bank decided on Nov. 3 to float the pound in an attempt to end a foreign-exchange crunch that had battered the economy and forced businesses to turn to the black market at a steep premium to the official rate.

“It was like buying drugs -- having to chase currency dealers on the street,” the 50-year-old said, asking that his full name not be used because black market trading is illegal. “And I couldn’t even report my real cost on books. Now there is hope things are moving in the right direction.”

Egyptian lenders need billions of dollars to meet demand from businesses starved for dollars, no small feat for a banking industry struggling to cope with a hard currency shortage that caused inflation to soar to 14 percent and some key commodities to disappear from store shelves. Ahmed’s case, however, suggests that the tide may be slowly turning.