Egyptian traders demand payment in dollars – Middle East Monitor
Egypt’s dollar shortage crisis has affected the availability of many consumer goods due to restrictions imposed by the Central Bank of Egypt on imports from abroad. This has put many businesses, especially car dealerships, under pressure from customer demands.
These pressures have prompted some car dealers, including Toyota Egypt, to demand that car buyers who asked to buy months ago pay the price of their cars in dollars instead of Egyptian pounds amid questions about the repercussions of this decision.
Last February, the Central Bank of Egypt decided to cancel the use of “collection documents”, replacing them with “documentary credits”. In this credit system, the relationship is between the importer’s bank and the exporter’s bank; the importer is obliged to pay the value of the imported shipment in advance, even if its cost is higher and takes longer.
Since last March, the value of the Egyptian pound has fallen by more than 25%, reaching around 19.70 pounds to the dollar, surpassing its highest price in the country’s history. This was in response to requests from the International Monetary Fund (IMF) to adopt a more flexible policy on the pound’s exchange rate as it continues to fall daily.
This caused car sales in Egypt to drop by more than half last August, reaching 8,700,000 vehicles compared to more than 18,000 in the same month of the previous year, with a drop of 52.5% and prices up by at least 50%. percent.
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The volume of car sales in Egypt fell to 148,500,000 vehicles in the period from January to August this year, compared to 186,300,000 cars in the same period last year, with a drop of 20%. , according to data released by the Egyptian Automotive Information Council (AMIC).
Due to their inability to meet the needs of their customers due to the shortage of dollars in the market, some companies have contacted buyers who have paid in advance and asked them to come to the company headquarters to a refund because the companies were unable to supply the vehicles.
This phenomenon has spread to real estate companies, with the announcement of a major real estate development company offering a residential plot for sale in dollars instead of Egyptian pounds, provoking strong reactions among Egyptians.
As for the legality of companies requiring their customers to pay in foreign currency, the head of the Egyptian importers division Ahmed Shiha explained: “The law prohibits any contract other than the local currency, what happened are violations, and some companies take advantage of circumstances and customer needs for specific products.The truth is that anyone who does this is subject to legal liability, and there is no transaction other than local currency.
“Dollar transactions are restricted in certain sectors, such as tourist hotels, universities and international and private schools. However, they require the equivalent value of foreign currency expenses and fees, not payment,” shared shiha with Arabi21.
He added: “It would have been better if these companies announced their new prices equivalent to the value of the product in dollars at the price adopted on the day of purchase or contract, rather than requiring customers to pay in dollars. since banks only accept a customer depositing foreign currency from an unknown source.”