Egyptians turn to black market for hard currency

11 Feb, 2013

A run on Egypt's pound has left foreign currency in short supply and driven some dealers into the streets in search of people with US dollars to sell, spawning a new black market.
The currency's decline was triggered by a political uprising that swept Hosni Mubarak from power in 2011 and it has officially lost 8 percent of its value since December 30. Black market rates are even weaker, a sign that although the central bank managed to stem the slide in official trade last week, Egyptians are nervous about holding on to pounds.
Some dealers tout discreetly outside regulated foreign exchange bureaux and banks in Cairo, illegally offering a better rate to those looking to sell hard currency. "There are no dollars. Everyone that walks in asks for dollars but supply is scarce," said one of the dealers.
The central bank took steps last week to manage the rate including narrowing the pound's trading band. It was last bid at 6.71 to the dollar on Sunday in interbank trade.

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