Egypt’s parliament speaker said in comments published Wednesday he wished to see illegal foreign currency dealers executed, arguing that the nation was facing an “economic war” that must be decisively confronted.
The speaker, Ali Abdel-Al, also called for the closure across the country of all foreign exchange bureaus, which are accused of pushing down the value of the Egyptian pound, describing them as a “cancer” in the nation’s economy.
“Egypt is being subjected to an economic war and a conspiracy that we must decisively confront to strike a balance between security requirements and the rights of citizens,” he said, according to the flagship state newspaper Al-Ahram.
Abdel-Al spoke Tuesday in parliament, a 588-seat chamber packed with supporters of President Abdel-Fattah el-Sissi, after lawmakers voted to toughen fines and prison terms for illegal trading in foreign currency, with offenders now facing up to 10 years in prison and a fine of up to five million pounds (some $570,000).
Even though authorities are unlikely to introduce capital punishment for illegal currency dealers, the speaker’s comments mirror the extent of concern felt by the administration over the falling value of the Egyptian pound against the U.S. dollar.
Abdel-Al has also been known for harsh public statements. Last week, he abruptly interrupted a lawmaker who inquired about whether retired military officers in government jobs are entitled to a pension. The lawmaker, screamed Abdel-Al, should not “talk like this about those in the armed forces who put their lives on the line.”
Egypt is negotiating with the International Monetary Fund over a $12 billion loan over three years to rescue its ailing economy. Deciding on a realistic value of the Egyptian pound is a key part of the negotiations, now in their second week.
According to media reports, IMF delegates see 11.60 Egyptian pounds to the U.S. dollar as a realistic exchange rate — that is nearly 3 pounds more than the current official rate of 8.87 pounds. A thriving black market offers up to 12.50 pounds to the dollar.
The exchange rate is crucial to Egypt, which depends on imports not just of staple food items but also industrial components and raw materials to keep the manufacturing sector going. Much of the imports needed by the private sector are financed by dollars bought on the black market.
Authorities have in recent week shut or suspended from operating dozens of exchange offices, saying they were buying foreign currencies well above the banks’ rates.
The foreign currency shortage is caused primarily by a slump in the vital tourism sector. Remittances from Egyptian expatriates have also fallen, and double digit unemployment and inflation rates have compounded overall economy owes.
