Small Exchange: Egypt holds customs exchange rate steady, new trading window for Nigeria and Nepal hotels push for forex facilities
This week's currency news rounded up.
Egypt maintains customs exchange rate
Egypt has retained its customs exchange rate at E£16.5 per US dollar, 10% below the market price for May.
Egypt's deputy finance minister for fiscal policies Amr al-Munir told Reuters that the country's inflation rate (30.9%) has skyrocketed since the currency was floated late last year in November.
The exchange rate in most Egyptian banks currently sits at around E£18.90 per US dollar.
Lagos leverages new forex window
Nigeria's central bank has opened a new window for investors and exporters to trade foreign currency.
The window was established to increase the availability of US dollars within the Nigerian economy, with banks, exporters and portfolio investors selling hard currency over the phone at rates determined by the market. This will deter the need for currency floats and devaluations, which can bring unwanted inflation.
Lagos Chamber of Commerce and Industry (LCCI) director-general Muda Lawal said the establishment of a separate investors and exporters foreign exchange trading window has relaxed restrictions and extended the scope of transactions and would help to restore normalcy within Nigeria's forex market.
Nepal hoteliers push for forex facilities
The Hotel Association Nepal (HAN) has lobbied Nepal's Rastra Bank (NRB) for official licensing in order to facilitate the sale and purchase of foreign currency for guests.
The Himalayan Times reported that HAN, an advocate for tourist standard hotels in Nepal, met with the NRB to discuss the possibility of extending the rules, which only allow hotels to accept foreign currency from guests on the basis that it covers the cost of their bill.
However, NRB deputy governor Chinta Mani Siwakoti stressed that hotels cannot be allowed to operate as money exchange firms as it would be a direct violation of the law.
"This is why the hotels have been enjoying the 2% margin on published exchange rates while accepting foreign currency for their service bills. If they start buying foreign currency from guests, there will not be a level playing field for banks and money exchange counters," he said.
In addition, not all hotels are allowed to accept foreign cash for services rendered. Just 135 hotels in Kathmandu Valley and 31 properties outside this area have the proper permission.
Each week Small Exchange sums up currency news from around the globe and looks into how it impacts exchange rates and options.