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Sunday, 31 July 2016

EGP strengthens on black market, crackdowns increase

The EGP strengthened even further against the greenback in the parallel market over the weekend, fluctuating between EGP 12.00-12.30 on Saturday, Al Mal reports. That’s down from EGP 12.80-13.00 at the start of last week and EGP 12.30-12.70 on Thursday, according to traders speaking to Reuters. Just don’t expect much in the way of liquidity: “Everyone is waiting for the central bank to lower the value of the pound. No one wants to buy or sell unless they have to,” one of the traders said.

Crackdown on FX bureau continues: The crackdown on the parallel market continued ton Thursday as investigators raided 10 exchanges in Cairo found to be trading at black-market rates, Reuters reports. Other bureaus in Alexandria and Cairo were also targeted for conducting business after their licenses were revoked. The official narrative is that the raids are stabilizing the parallel market, and banking sources say the crackdowns were led by security forces coordinating with the CBE. An FX trader tells AMAY that the government even threatened to shut down all exchanges for three months until the market is stabilized.

Hoarding USD gets you a ticket to hell (or at least points in your bad book): Even Al Azhar is joining in the effort to curb the parallel market for FX, declaring the hoarding of foreign exchange to profit on a trade is a sin, Al Borsa reports.

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