Foreign reserves have halved from over $36 billion before the revolt to about $17.5 billion in May REUTERS/Amr Abdallah Dalsh
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Egypt's efforts to stamp out illicit currency trading is pushing black market dealers to carry out transactions abroad, beyond the reach of the law, robbing the economy of its last vital source of foreign currency. Dealers say they are scooping up dollars held by expatriate workers and exporters before they ever enter Egypt, exacerbating the dollar shortage at the heart of the currency crisis that has undermined investment and hit trade and manufacturing.The yawning gap between an official dollar rate of 8.8 Egyptian pounds and a black market rate close to 11 pounds is encouraging expatriates to circumvent the banks.Central bank officials were not immediately available to respond to queries about black market dealers carrying out transactions abroad.The central bank has been forced to ration dollars and prioritize essential goods like food, introducing restrictions on the transfer and deposit of foreign currency.Again, the transactions take place abroad and the foreign currency never enters Egypt.Egypt is seeking to dampen dollar demand by cutting imports of non-essential goods the central bank blames for the crisis.
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