Campaign to boycott the dollar in Egypt.. Will the currency shortage crisis be solved?

Campaign to boycott the dollar in Egypt.. Will the currency shortage crisis be solved?
Campaign to boycott the dollar in Egypt.. Will the currency shortage crisis be solved?

Some commercial sectors in Egypt launched a campaign to boycott the purchase of the dollar on the black market after its price exceeded 41 pounds compared to 30.90 pounds in the Central Bank, an increase of at least 33 percent; Due to increased demand and scarce supply.

The campaign promoted by the media in Egypt, and the talk about companies publicly obtaining hard currency from the black market without fear of accountability, confirms the market’s control, the absence of the central bank’s role, and the decline of the state’s role in pursuing currency dealers and brokers, despite the Egyptian law that criminalizes currency trading.

According to Egyptian law, Article (126) of Banking Law No. (88) provides for the punishment of imprisonment for a period of no less than 3 years and no more than 10 years, and a fine of no less than one million pounds and no more than five million pounds, or the amount of money involved in the crime, whichever is greater. Deals in foreign exchange outside approved banks or authorized entities.

The same article stipulates the confiscation of the amounts subject to the crime, and whoever violates any of the provisions of Articles 113 and 117 of this law shall be punished by imprisonment for a period of no less than 6 months and not more than 3 years, and a fine of no less than one million pounds and not exceeding 5 million pounds.

The beginning was with a call by the Car Dealers Association, all importers, agents and distributors dealing in the local car market, to stop buying dollars from the black market, under the slogan “Support the pound, the currency of your country.”

In a statement, the association called on all merchants not to contribute to creating a state of demand for the dollar, and to stop for a month importing cars and dealing in foreign exchange from the period May 15, 2023 until June 15, 2023 until the country’s conditions stabilize.

The market has other accounts
One of the dealers in the currency market, called Aba Tariq on the outskirts of Giza Governorate, says: “As if the devil is preaching. To 15 percent of the price of the car to save it without reservation and waiting, and to ask some agents to pay the price of the car in dollars.

Regarding the exchange rates of the dollar against the pound, he explained to “Arabi 21” that “the exchange rate of the dollar reached 42 and 43 pounds in the parallel market for two days before it retreated to the level of 38 pounds, but this decline has nothing to do with that campaign, because the dollar crisis continues and nothing new was found in it.” The matter, and in the financial world, there is no language of emotions and tickling of national feelings.

And he continued: “All there is is that the dollar is like gold, whenever it touches its highest historical point, it bounces down by about 10% for several days and maybe a few weeks before continuing to rise, as happened at the top of 20 pounds, and the top of 30 pounds, and this time at the top of 40 pounds.” .

Local websites quoted some other sectors as considering joining the initiative, and the possibility of not being able to import for a full month in the event that there is a stock of commodities that allow their availability in the market, which is already suffering from a rise in commodities.

One of the electrical appliances merchants in the city center, Muhammad Helmy, commented on the campaign by saying: “The market is already suffering from a shortage of goods and high prices. Joining the campaign in the electrical appliances sector, for example, will increase the price in light of the lack of stock to replace the goods sold in the markets.”

Helmy predicted in his interview with “Arabi 21” that “the response to the call to boycott the dollar will be limited, because in the end the demand for buying dollars after the end of the boycott will be doubled due to the scarcity of goods, and with the increase in demand for it, it will witness an unprecedented rise because the black market has become the main source of its availability.” “.

Call to order courtesy
Dr. Alaa Al-Sayed, a consultant for financing and developing projects and investment endowments, downplayed the importance and impact of this initiative.

He said: “If you get angry, do it with kindness (courtesy). Egypt has almost no car trade, and what we see of agencies and exhibitions is not at all commensurate with the size of the Egyptian market and is not compared to countries less than us in number that manufacture and export cars many times the numbers in Egypt, such as Morocco and South Africa, for example.” “.

He told “Arabi 21”: “Despite the severe weakness in the activity of trading and manufacturing cars in Egypt, the Central Bank of Egypt and the Egyptian banking system cannot obtain dollars to cover import bills, whether for finished products (cars) or for production requirements and spare parts, unfortunately, otherwise, why did car sales decline? More than 75 percent is in Egypt.. Isn’t it because of the difficulty of importing?

It does more harm than good
According to Alaa Al-Sayed, this negatively affects economic activity, retail trade, the food processing sector, and agriculture, which depends on transporting production requirements and finished products on the land transport fleet by trucks. to import food and strategic food commodities, which the army’s economic units almost monopolize; Thus, the import of new cars takes a late priority in securing dollars.

And the economist added, “Accordingly, the campaign launched by car dealers and importers to boycott the dollar, in my estimation, is only an available expression, and it is the maximum permissible expression of anger and rejection of lame government monetary and banking policies that paralyze the import and trade of cars and their spare parts and maintenance.”

He concluded his speech by saying: “In the end, there is no value to what they announced in terms of a boycott, no effect, and no effect other than diverting attention from the responsibility of the government, the Ministry of Finance, the Central Bank, and the banking system for the stifling economic crisis that the country is going through and the scarcity of dollars in the markets.”