Over $400 million were sold to Egyptian banks in cash last week, announced the governor of the Central Bank of Egypt, Hisham Ramez, in a phone interview with CBC satellite channel on Sunday. The banking system has seen an additional $1.3 billion in foreign currency proceeds above the normal level in the same week, Ramez added. Since early February, the CBE has imposed new restrictions on cash deposits in US dollars, in an attempt to eradicate the country's foreign currency black market. The new rules stipulate that individuals and companies are not able to deposit over $10,000 in a day and $50,000 a month in Egypt's banks. There are no limits on the sales of dollars to banks, stressed Ramez, the limit being only for cash deposits. "In the first week of implementing the policy we expected turbulence, rumours and criticism of the decision for their personal interest," said Ramez, conceding that the availability of foreign currency has been a problem for importers, but adding that he expects an improvement this week. The priority goes to importers with goods languishing in customs as they were imported before the deposit cap was imposed, he added. Reported price rises of imported goods are "unjustified" and "exploitation" and unrelated to the CBE's managed devaluation of the pound, said Ramez, at a time "when all international prices are falling." Egypt has let the pound drop steadily in the new year as it strives to close the gap between the official and black market exchange rates. After losing 5.5 percent of its value against the dollar since 18 January, the central bank has kept the official exchange rate steady for the last three weeks, with the pound currently trading at EGP 7.53 against the dollar. Source: Ahram Online
