Small Exchange: IMF challenges Nigeria’s forex constraints, illicit Indian money changers are targeted and Egypt’s foreign debt rises
This week's currency news rounded up.
IMF urges Nigeria to scrap forex constraints
The International Monetary Fund (IMF) has called for the African nation of Nigeria to repeal foreign exchange restrictions and scrap its system of multiple exchange rates in order to bolster the economy.
In reply, the Central Bank of Nigeria (CBN) said it was determined to sustain the provision of foreign exchange, ensuring market liquidity, accessibility and affordability.
CBN says that the central bank plans to add further foreign exchange to the market this week.
Currently, CBN forces firms to buy dollars for a premium at the rate available on the black market, where the currency trades around 30% weaker than the official exchange rate.
Indian money exchange firm issued show cause order
India's Enforcement Directorate, which is responsible for fighting economic crime, has issued a show cause order to Ahmedabad's Gini Money Changers for alleged violations of the Foreign Exchange Management Act.
The Indian Express reports that the city-based firm allegedly made illegal foreign exchange transactions against cash payments through old demonetised currency, to the tune of US$158,500.
The case was built on intelligence gathered after the office of the company was searched in November last year, when Indian and unaccounted foreign currencies were seized.
Egypt's foreign debt increases in 2016
The Central Bank of Egypt (CBE) has revealed that foreign debt levels rose by $19.5 billion in 2016, totalling $67.3 billion in December last year, according to Daily News Egypt.
Foreign debt was equal to more than 37% of Egypt's gross domestic product (GDP) in December 2016.
How? The Egyptian government obtained additional direct foreign loans from a variety of international financing institutions, as well as the issuance of billions in bonds on international stock markets.
Egypt also received a loan for $2.75 billion from the IMF, $1 billion from the World Bank, $500 million from the African Development Bank, $1 billion from the United Arab Emirates and $2 billion from Saudi Arabia.
Each week Small Exchange sums up currency news from around the globe and looks into how it impacts exchange rates and options.