Egypt Approves Tougher Penalties on Black Market Dollar Traders

CAIRO, Egypt, Capital Markets in Africa: Egypt approved tougher measures against illegal foreign currency traders as authorities seek to ease dollar shortages that are contributing to economic weakness.

The government increased jail time for black market trading to as long as 10 years and raised fines, the cabinet said in an e-mailed statement. Other amendments to the central bank law give the governor the authority to suspend currency bureaus’ licenses and impose fines for violations. The changes still need to be approved by parliament.

The central bank mostly blames speculators for weakening the pound, which has lost about a fifth of its value against the dollar in the official market since the start of last year. To help attract funds from the black market, Egypt has hiked interest rates and eased restrictions on dollar deposits in banks.

The efforts have yet to bear fruit. In the unregistered market, the pound changes hands at about 10.94 per dollar, compared with the official level of 8.88, according to three dealers surveyed by Bloomberg on Tuesday.

Source: Bloomberg Business News