CAIRO: Recent measures taken by Egypt’s Central Bank to address the parallel market have been “welcome,” said Masood Ahmed, the International Monetary Fund’s (IMF) Director of the Middle East and Central Asia Department.
Masoud’s remarks was part of a press briefing on the Middle East and Central Asia Economic Outlook Update held Friday on the sidelines of the World Bank Group and IMF 2015 annual Spring meetings in Washington, D.C.
In comments to Egypt’s Al Borsa Newspaper, Masoud said “ they are welcome because they do try to bring about a reduction of any differential between the parallel market and the official market.”
Having a unified market “would help to create the basis for more investment, and better functioning of the exchange markets, and as a result encourage investment and growth,” added Masoud.
After its clampdown against the black market, the CBE allowed the pound to hold steady against the dollar over the past two months after 10 consecutive depreciations that began Jan. 18.
The Egyptian pound held steady at 7.53 per U.S. dollar at a regular Central Bank foreign exchange auction Thursday, the lowest level Egypt’s Central Bank (CBE) allowed the local currency to reach since auctions began in December 2012.
The pound stabilized against the dollar on the parallel market as it was changing hands at 7.62 EGP per dollar, a very close price to 7.63 per dollar at the official market, a dealer told The Cairo Post.
A $10,000 daily cap for cash deposits in hard currency for both individuals and companies, with a maximum of $50,000 monthly, was part of CBE measures against the black market in February.
Banking expert Khaled Ateya told The Cairo Post that the black currency market witnessed a sharp decline in volumes due to the central bank’s decision to depreciate the pound in the official market and impose the ceiling on dollar-denominated deposits in banks.
“This ceiling on deposits has deprived those exchanging their dollars outside the official market from a place to deposit their cash,” said Ateya.
Egypt’s Ministers of Investment, International Cooperation and the Central Bank Governor are participating in spring meetings where they are expected to review the latest economic and fiscal reforms applied in the country.