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Closing Exchange Companies: Supporters and Opponents

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The negotiation has flamed out after the announcement of Dr. Ali Abdel Aal -the speaker of the parliament- regarding closing the currency exchange companies. He said that those exchange companies are like the “cancer in the Egyptian economy”. Also, it worth to mention that about 46 company have been closed since the beginning of the year and so far. Moreover, between the supporters and the opponents, there are a lot of ideas that have been presented to settle this crisis. As this crisis may affect the real estate market. So, Murabahat decided to tackle it via presenting the different opinions of both sides and the suggested solutions.

Supporters for Closing Exchange Companies

Some people believe that closing the exchange companies is not the solution for the dollar crisis as they think that it’ll motivate the existence of the illegal market, affect the investment negatively, the economy, and tourism as tourists usually head to exchange companies for changing their currency. In addition, those companies are characterized by the full-time working system. Also, changing currency from the bank require a lot of time which a lot of people can’t afford, and that banks will not be able to provide liquidity to customers on its own.

Opponents for Closing Exchange Companies

On the other hand, other people think that those companies have already broken a lot of laws and it is necessary to put an end to these abuses as the decree of closing it must block such illegal markets in Egypt.

So, among the economists, the NPC deputies, the newspapers, and the businessmen, there are a lot of suggestions that have been presented to deal with those companies such are:

  1. Enacting penalties on the contravener companies which increase the economic crisis,
  2. Putting specialized supervisors from the Central Bank of Egypt (CBE) in every branch of those companies to oversee the work process and to make sure that those exchange companies don’t break the rules,
  3. Building exchange companies affiliated to the (CBE) that abides a full-time system,
  4. Modifying the organizational structure of those companies and formatting a staff inside the (CBE) to adjust its work process according to the law.

Conclusion

Some people believe that those currency exchange companies are a complement to banks, not a competitor. So, to settle this crisis, strict laws should be enacted, oversee them, and enacting penalties on the contravener companies.