The Egyptian central bank has struck another blow against the country's unofficial currency market, with a cap on the amount of dollars that can be deposited in banks, private bankers and a central bank source said on Thursday. The cap on deposits should discourage use of the black market by depriving those who want to exchange dollars outside official channels of a place to keep their funds.
The cap is the latest step in efforts to curb the black market. In the past three weeks, the central bank has allowed the pound to depreciate after six months of stability and given banks a wider band around the official rate in which to trade dollars. Now it is limiting dollar deposits in banks to $10,000 a day or a total of $50,000 a month. The new limits came after a meeting on Wednesday between the central bank governor, Hisham Ramez, and leaders of Egyptian banks, private bankers and a central bank source told Reuters.
The action was aimed at combating money laundering as well as "the final elimination of currency trading and an end to the parallel market's dealings," the central bank source said. Egypt wants to get the pound to a level the market sees as fair, as part of a raft of economic reforms it hopes will burnish its image before a major investment conference in mid-March.
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