UPDATE: Egypt’s business digest Aug. 10: Egypt closes 48 forex bureaus in black market crackdown; annual core inflation fell to 12.31%
A bank employee counts stacks of Egyptian 5 pound and 50 piastre notes as he works at Bank Misr in downtown Cairo, Egypt, June 8, 2016. REUTERS/Amr Abdallah Dalsh

CAIRO: No more browsing from site to site, view the top business news stories on August 10 here:

 

Egypt closes 48 forex bureaus in black market crackdown, sources say

(REUTERS): Egypt’s central bank has closed 48 foreign exchange bureaus since the start of the year for trading at black market rates and other violations, banking sources said on Wednesday, as the country tries to end speculation against the Egyptian pound.

Egypt has accelerated a crackdown against black market traders it blames for growing pressure to devalue the currency. The dollar is being sold on the black market for about 12.65 to 12.75 Egyptian pounds, according to traders, far more than the official rate of 8.78.

Import-dependent Egypt has struggled with a worsening shortage of foreign currency since the 2011 uprising that ended Hosni Mubarak’s 30-year rule but also scared away foreign investors and tourists — key earners of hard currency.

Egypt’s parliament on Tuesday set prison sentences of three to 10 years and fines up to 5 million pounds ($563,000) for black market currency trading.

“The number of exchange companies closed since the beginning of the year are 48, of which 26 have been closed permanently and 22 have been suspended for three months to a year,” the banking official, who spoke on condition of anonymity, said.

“The total number of foreign exchange bureaus licensed to operate in Egypt was 115 at the end of last year, but now there are only 67.”

Egypt devalued its currency by nearly 14 percent in March in an effort to close the gap with the black market rate. The move failed to ease an acute shortage of foreign currency and the spread quickly widened again.

Net foreign reserves have more than halved since 2011, to reach $15.536 billion in July, enough for less than three months of imports.

Egypt is in negotiations with the IMF for a $12 billion three-year lending program it hopes will plug a funding gap, restore market confidence and lure investment to ease the currency crunch.

But economists say another devaluation is all but inevitable this year and reforms should include a shift to a more flexible exchange rate. The central bank has said it will not float the pound until foreign reserves reach at least $25 billion, a figure it aims to achieve by the end of the year.

 

EGX closes at collective rise Wednesday

The Egyptian stock market closed Wednesday at a collective rise of all indices, while the main index EGX30 increased by 1.10 percent.

 

Egypt’s core inflation edges down to 12.31 pct in July – c.bank

(REUTERS): Egypt’s annual core inflation fell to 12.31 percent in July from 12.37 percent in June, the central bank said on Wednesday.

Core inflation, which strips out the price of volatile items such as fruit and vegetables, had been rising since March.

 

Egypt’s cabinet approves draft tax settlement bill amid IMF talks

(REUTERS): Egypt’s government approved a draft bill that would settle tax disputes, the cabinet said in a statement on Wednesday, a move aimed at restoring confidence with investors amidst ongoing talks with the International Monetary Fund.

Over 6,000 tax dispute cases worth about 47 billion Egyptian pounds ($5.29 billion) are in the court system, in addition to 150 civil disputes, Deputy Finance Minister Amr al-Mounir said in a news conference.

“The draft bill is an important tool for encouraging voluntary upholding of the tax law and aims to expedite dispute settlement with investors as well as create a climate of trust between investors and the tax authority,” the cabinet said.

The bill, which still has to go to parliament for approval before it becomes law, allows tax disputes to be settled by committees headed by experts who do not work for the tax authority.

The settlement process would start as soon as an investor submits a request to the tax authority. As soon as the request is made, court proceedings would be suspended for three months.

Cairo is in the midst of talks with the International Monetary Fund to secure a $12 billion three-year loan programme, and restoring investment confidence is key to sealing a deal it hopes will plug its funding gap and restore market confidence hit by an acute shortage of foreign currency.

Egypt is also seeking to push ahead with reforms, including VAT and cuts to electricity and petroleum subsidies that were begun in 2014 but put on hold when global oil prices dropped.

The economy has been struggling since a mass uprising in 2011 ushered in political instability that drove away tourists and foreign investors, both major earners of foreign currency. The turmoil has seen foreign reserves more than halve from some $36 billion before the uprising to $15.536 billion in July.

 

Egyptian exchange opens on mixed note, EGX30 adds 0.15% 

The Egyptian Exchange (EGX) opened on mixed note in Wednesday’s early trading, as the benchmark index EGX30 added 0.15 percent, Youm7 reported.

The small and medium caps index EGX70 dropped by 0.13 percent, while the broader index EGX100 edged down 0.04 percent.

The benchmark index went down 0.89 percent or 73.5 points closing at 8,199.65 points on Tuesday.

 

Egypt’s annual urban consumer price inflation stood at 14 pct in July: CAPMAS

Egypt’s annual urban consumer price inflation stood at 14 percent in July, the statistics agency CAPMAS said on Wednesday.

Egypt’s urban consumer price inflation figure had been rising since April, when it entered double-digit territory propelled by currency devaluation and the lead up to the fasting month of Ramadan, when food prices tend to temporarily spike.

 

60m EGP allocated for road rehabilitation plan in Giza: governor

A total of 60 million EGP from the 2016-2017 fiscal year budget has been allocated to raise the efficiency of 22 roads in Giza governorate, Governor Mohamed al Daly was quoted by Youm7 on Wednesday.

The road rehabilitation plan includes paving, maintenance and repaving works for important roads in 23 cities across the governorate, he added.

 

50% drop in Egypt’s inbound tourism rate during 1st half of 2016: official

The number of tourists visited Egypt during the first half of 2016 dropped by 50 percent to register three million down from around 6 million during the same time last year, Mahmoud Sami, head of Egypt’s Tourism Promotion Authority told Al Ahram on Tuesday.

Number of tourists visiting Egypt has sharply declined following the crash of the Russian passenger plane over Sinai in October 2015.

Tourism revenue totaled $500 million in the first quarter of 2016, around 66 percent down compared to the same quarter a year earlier, a tourism ministry adviser told Reuters in April.

 

196 ships transit Suez Canal in past 4 days: chairman

A total of 196 vessels have transited the Suez Canal during the past four days with a total cargo of 11.3 million tons, Suez Canal Authority Chairman was quoted by Youm7 on Wednesday.

The south-bound convoy included 113 vessels carrying 6.2 million tons, while the north-bound convoy included 83 ships carrying 5.1 million tons, said Mamish.

 

 

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