Egypt: parliament approves jailing of black market currency dealers

Egypt: parliament approves jailing of black market currency dealers

Egypt’s parliament approved on Tuesday a cabinet bill allowing the government to prosecute and jail sellers of foreign currency on the black market.
According to the state-owned MENA agency, the law sets jail sentences of six months to three years as well as fines reaching EGP 5 million to traders charged with breaking the 2003 foreign exchange law.

The approval of the bill came following a request by The Central Bank of Egypt (CBE) to address the “danger” posed by black market trading.

According to the request by the CBE, the practices of these bureaus lead to dollar sell-off rates that are far from the official rates.

Reuters reported on Tuesday that the US dollar was changing hands at EGP 12.65, up from last week’s range of EGP 12.20 to EGP 12.50, even though the CBE has kept steady the official rate at EGP 8.78 against the dollar since a 13.5 percent devaluation in March.

However, parliament speaker Ali Abdel-Al says the measure does not go far enough, calling for legislation banning currency exchange bureaus altogether.

“Currency exchange offices are like a cancer in Egypt’s body, I wish the amendments were adjusted to sentence those who are manipulating in the market to death,” Abdel-Al said.

On Monday, the CBE shut down five licensed currency exchange bureaus, cutting in half the country’s 94 licensed bureaus.

Citing an anonymous bank official, MENA reported on Monday that 47 bureaus have been shut down so far. Of the currency exchange bureaus closed, a total of 26 have been closed permanently and had their licences revoked, while the remainder have been shut for six, eight or 12 months, according to their individual violations.

Egypt, which relies heavily on imports to support its population of 91 million, has been suffering from an acute shortage of the US currency in the wake of 2011 uprising, which was followed by political and security unrest that has turned away tourists and foreign investors, two major sources of hard currency.

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