As the pound continues to plummet against the US dollar, Egyptians have been scrambling to find ways to deal with the dollar crisis. A shortage of hard currency, and the goods hard currency can buy, has become a serious inconvenience at a time when life is already complicated, pushing people to cut back on purchasing and engage in shady transactions.
With a severe shortage in foreign currency, businesses have been unable to pay for their usual supplies of imported goods. People who used to rely on neighborhood stores for specialty products or equipment to fuel their professions or hobbies are often out of luck.
Sara al-Sherif, who grew up in New Jersey but now lives in Cairo, says she used to buy food products imported from the United States to meet her dietary needs. However, the 28-year-old says several major supermarket chains that used to supply these products no longer have them on their shelves. Unable to find local substitutes, she’s had to make do without her healthier options.
Other niche products have also disappeared from the market. Singer-songwriter Shady Ahmed says the prices of musical instruments have increased dramatically and other products are completely unavailable. “It has become increasingly difficult to purchase good quality products because suppliers cannot afford to buy them and those who do end up increasing prices just so they can sustain their businesses,” he says. As a result, Ahmed has stopped buying equipment for now.
Meanwhile, Amr Amin, who works at a local investment bank, notes that he can no longer find motorcycle gear. Local dealerships have started charging in dollars in order to maintain profit margins, he says. Spare parts and accessories are also in short supply. “Some of the much smaller stores were using credit cards to order stuff, but that’s dead completely now because of the new limits,” says Amin.
In a July 31 address to a youth leadership forum, President Abdel Fattah al-Sisi denounced the transformation of the dollar into a “commodity” and called for the government to take measures against it.
However, due to the gap between the price of the dollar on the black market, at approximately LE12.7, and its official exchange rate at LE8.88, some Egyptians have managed to profit.
One person, who asked to remain anonymous, says he has been converting his assets into hard currency by finding Egyptians living abroad who need to transfer money to their family members in Egypt. Instead of going through Egyptian banks, which means selling their dollars at the bank’s purchasing rate of around LE8.85, expatriate Egyptians transfer foreign currency to his overseas account. He, in turn transfers pounds to their relatives in Egypt. He offers them a slightly better rate than the banks, allowing both sides to make a profit.
Other people have issued credit cards in Egypt with local currency, and get cash advances in hard currency while traveling abroad. When they return to Egypt, they pay off their credit card bills in pounds, at the bank’s going rate, and sell the dollars on the black market.
Banks have caught on, tightening restrictions on using ATMs and credit cards overseas. In some cases, withdrawals abroad are limited to just US$250 per month, a limit that curtails currency trading but has also proven to be a major inconvenience for Egyptians traveling, living or studying abroad that need to use their Egyptian bank accounts to cover their expenses.
The depreciation of the pound has also thrown off people’s budgeting and some have grown more conscious of how much they are spending.
Amr Amin and his wife planned to buy a car and had settled on a suitable option. In the two weeks it took them to arrange financing, the price of the car increased by LE6,000 which forced them to reconsider.
Menna Gaafar says she too planned to buy a car, but changed her mind due to the sudden hike in prices. Gaafar and her husband have been eating out much less due to restaurants increasing their prices, going out once a month rather than twice a week like they used to.
Other people have also been limiting their online purchases, such as filmmaker Marwan Imam. It’s not so much the cost of goods he explains; international credit card transactions are processed using the official exchange rate. However, customs fees have increased dramatically for the type of equipment he needs.
Mahmoud al-Durrah is also witnessing these cutbacks from the perspective of a vendor. An athletics coach who designs nutrition programs, he previously had a large client base in Egypt. “My sales in Egypt have gone down because people are no longer able to afford it,” he says.
As Egyptians grow more frustrated with the dollar crisis, the media has been quick to point the finger of blame at the Muslim Brotherhood in order to take some of the heat off the state.
In an article for the privately owned Al-Wafd newspaper under the title, “Brotherhood conspiracy to increase the price of the dollar to LE15,” the partisan newspaper claims five currency exchange companies owned by members of the Muslim Brotherhood have been purposely increasing the price of the dollar every two hours.
Member of Parliament Mostafa Bakry issued statements to Sada al-Balad Channel in late July reaffirming that the dollar crisis is a Brotherhood conspiracy, while also comparing reconciliation between the Egyptian state and the Muslim Brotherhood to reconciliation between Germans and Nazis.
Others blamed a very specific group in Egypt: foreign household staff who are paid in dollars. A Facebook group called “No more dollars for you!” claims these domestic workers are the real culprits behind the shortage of the dollar in the country. The closed group writes, “This group is for the people who are interested in saving the economy of the beloved Egypt by participating in putting an end to the mafia that drains its dollar reserve. That is, foreign helpers, maids and nannies who get paid in dollars.”
Much like most of the hardships Egyptians have experienced over the past five years, the dollar crisis has inspired a slew of hilarious reactions and internet memes. Some are directed at the president, others ridicule the pound, and some express growing feelings of frustration — (the first reading: “Increase of price of dollar to LE13,” and the next: “Decrease of price of dollar to LE11”).