Banque Du Caire mulls establishing forex firm to combat black market

Egypt’s third biggest public lender, Banque Du Caire is studying establishing a foreign exchange firm in a bid to combat black market traders and violated forex bureaus.

“I believe it is the right time to establish such a foreign exchange firm, which will be a strong effective monetary policy tool to combat black market, an official Banque Du Caire spoke to state news agency MENA on Thursday on condition of anonymity.

Those kind of proposed foreign exchange firms will be subject to regulatory control; they will be under the supervision of the central bank, Egyptian Financial Supervisory Authority (EFSA), and the bank’s general assembly, said Ruqaya Riad, a legal adviser to the Federation of Egyptian Banks.

Both the central bank and EFSA will be charge of determining the capitalisations of those firms, Riad added.

Since the start of the year, a total of 53 foreign exchange bureaus have been closed as the central bank accelerated a crackdown against black market traders, closing a large number of the countries’ foreign exchange offices, which it blames for growing pressure to devalue the currency.

Egypt is facing a dollar shortage with sources of hard currency inflows like tourism and investment slowing down. Driven by the shortage, rates on the black market exceed 12.65 to the dollar while banks kept the pound steady at 8.88.