Egypt eliminated dollar black market, boosted exchange rate flexibility: PM - Egypt Today

Egypt's government has achieved a significant milestone in its economic reform agenda by dismantling the informal dollar black market while simultaneously introducing greater flexibility into its official exchange rate mechanism. This dual achievement represents a watershed moment for the country's monetary policy framework and carries substantial implications for European businesses operating across Egypt's diverse sectors. The elimination of Egypt's parallel currency market—which had flourished during years of capital controls and official rate rigidity—addresses one of the most persistent distortions in the nation's financial ecosystem. For over a decade, Egyptian importers, investors, and ordinary citizens faced a bifurcated currency system: an official rate that bore little resemblance to market realities, and an informal market where dollars commanded premium prices sometimes 30-50% above official levels. This arbitrage created enormous friction costs, discouraged legitimate foreign investment, and incentivized illicit financial flows. By transitioning toward a more flexible exchange rate regime, Egypt has signaled its commitment to allowing supply-and-demand dynamics to determine currency valuations. This approach aligns with International Monetary Fund recommendations and represents a fundamental shift from the state-controlled monetary architecture that characterized Egyptian policy for decades. The Central Bank of Egypt has progressively widened its trading bands and reduced intervention frequency, permitting