Debate in Tunisia over Role of Currency Exchange against Black Market

A shopkeeper counts money in of his shop at a bazar in Tunis, Tunisia. (Reuters file photo)
A shopkeeper counts money in of his shop at a bazar in Tunis, Tunisia. (Reuters file photo)
TT
20

Debate in Tunisia over Role of Currency Exchange against Black Market

A shopkeeper counts money in of his shop at a bazar in Tunis, Tunisia. (Reuters file photo)
A shopkeeper counts money in of his shop at a bazar in Tunis, Tunisia. (Reuters file photo)

The Central Bank of Tunisia (BCT) has allowed foreign exchange activities outside the banking system, in favor of a group of licensed manual exchange offices. This has allowed financial activities to develop and evolve over the past months, reaching about 25 offices, up from seven in June.

BCT Governor Marouane Abassi confirmed that the bank has approved 45 applications to open exchange offices since the beginning of the year, which is expected to contribute to increasing the number of those offices that work in coordination with the Central Bank and the rest of the banking system.

Abbasi hopes this will curb illegal and speculative activities that are part of illegal financial operations, such as in the black market.

There are currently six exchange offices in Tunis, six in Sousse and three in each of Nabeul, Mahdia and Madania.

Legally, exchange offices are bound to the BCT, which determines the conditions for obtaining their licenses and the reasons for revoking their authorization in case of breaches.

Anyone wishing to engage in manual exchange is required to provide a bank guarantee of about $17,000 to the central bank.

The bank confirmed that licensed manual exchange offices will contribute to the legalization of currency purchase, which will limit illegal means of buying and selling currencies in Tunisia.

At least $1 billion is traded outside the banking system, leading to enormous economic damage resulting from the decline in domestic reserve of foreign currencies and banks losing a significant financial commission from various exchange operations, according to official statistics.

Some experts are skeptical about the effectiveness of these offices in reducing the phenomenon of illegal speculation in hard currency.

However, others believe that the results are beginning to emerge, as Tunisia's foreign exchange reserves have risen to around 95 supply days, after hitting a low of 73 during in early 2019.



Egypt Quarterly Current Account Deficit Eases to $2.1 Billion on Higher Remittances

A man walks in front of the new headquarters of Central Bank of Egypt, in Cairo, Egypt, November 3, 2024. (Reuters)
A man walks in front of the new headquarters of Central Bank of Egypt, in Cairo, Egypt, November 3, 2024. (Reuters)
TT
20

Egypt Quarterly Current Account Deficit Eases to $2.1 Billion on Higher Remittances

A man walks in front of the new headquarters of Central Bank of Egypt, in Cairo, Egypt, November 3, 2024. (Reuters)
A man walks in front of the new headquarters of Central Bank of Egypt, in Cairo, Egypt, November 3, 2024. (Reuters)

Egypt's current account deficit narrowed to $2.1 billion in January to March 2025 from $7.5 billion in the same period a year earlier, the central bank said on Tuesday.

The central bank attributed the slimmer deficit to the increase in remittances from Egyptians working abroad, as well as a rise in the services surplus due to higher tourism revenue.

Oil exports declined to $1.2 billion, from $1.4 in the year earlier, while imports of oil products rose to $4.8 from $3.4 billion.

Egypt has sought to import more fuel oil and liquefied natural gas this year to meet its power demands after disruptions to gas supply led to blackouts over the last two years.

Concerns over supplies increased after the pipeline supply of natural gas from Israel to Egypt decreased during Israel’s air war with Iran last month.

Revenues from the Suez Canal, declined to $0.8 billion in the third quarter of the country’s financial year, from $1 billion the same time a year ago, as Yemeni Houthis' attacks on ships in the Red Sea continued to cause disruption.

The Iran-aligned group says it attacks ships linked to Israel in support of Palestinians in Gaza.

Meanwhile, Egypt’s tourism revenues reached $3.8 billion, compared to $3.1 billion in the same period in 2023/24.

Remittances from Egyptians working abroad increased to $9.3 billion, from $5.1 billion. The increase in remittances has helped to reduce the wider trade deficit.

Foreign direct investment hit $3.8 billion, compared to $18.2 billion in the same quarter a year before.

Egypt has suffered an economic crisis exacerbated by a foreign currency shortage, which forced it to undergo economic reforms under an $8 billion IMF program that included allowing its pound to depreciate sharply last year.