Egypt's black market dollar rate steady after EgyptAir crash

A customer counts his Egyptian 50 pound notes at an exchange office in downtown Cairo, Egypt, on April 19, 2016.
A customer counts his Egyptian 50 pound notes at an exchange office in downtown Cairo, Egypt, on April 19, 2016. PHOTO: REUTERS

CAIRO (Reuters) - Egypt's pound held steady on the black market on Sunday (May 22), days after an EgyptAir plane crash in the Mediterranean that has threatened to further damage the country's ailing tourism industry, a key source of hard currency.

The EgyptAir crash was the third blow since October to hit Egypt's travel industry, a critical dollar-earning sector that has struggled to rebound after the 2011 uprising which ended Hosni Mubarak's 30-year rule.

A shortage of foreign currency has hampered Egypt's ability to import. Foreign reserves have more than halved since 2011 to stand at US$17.01 billion (S$23.5 billion) at the end of April.

A shortage of dollars in the formal banking system has pushed many businesses to a black market for dollars where they can procure currency for a higher price.

Two black market traders said the pound was trading at 10.95-96 to the dollar on Sunday, modestly weaker than the 10.90 they said it was trading at the day before the EgyptAir crash.

The central bank has kept the pound artificially strong at 8.78 per dollar after devaluing its currency from 7.73 in March and announcing a more flexible exchange rate policy.