18 EgyptAir employees detained for trading company funds in parallel market

CAIRO – 7 March 2024: Egypt's Public Prosecution has detained 18 individuals responsible for EgyptAir's treasury on allegations of illegally trading nearly $1 million of the company's funds in the parallel market.

According to a statement by the Administrative Control Authority (ACA), investigations revealed that the employees embezzled money from the company's treasury, which includes fees collected from travelers.

They sold the money on the parallel market, and then deposited the proceeds in the treasury in local currency, profiting from the difference between the official exchange rate and the parallel market rate.

Prosecutor-General Mohamed Shawki ordered the detention of the employees pending further investigation following the discovery of sums of foreign currency in their possession.

The prosecution's inquiry into the incident is ongoing.

The ACA emphasized that this security effort is part of the state's broader endeavors to combat corruption and identify illicit practices in foreign currency trading outside the banking sector.

Foreign currency shortage

Egypt has been contending with a foreign currency shortage for the past two years, exacerbated by the widening disparity between the official exchange rate and the price of the Egyptian pound in the parallel market.

In recent months, the Ministry of Interior has intensified its crackdown on illegal foreign currency trading.

Furthermore, the Central Bank of Egypt announced on Wednesday its decision to allow the currency to trade freely, a highly anticipated move expected to significantly narrow the gap between the official and informal exchange rates of the Egyptian pound.

Following this devaluation, the value of the Egyptian pound decreased to around 50 per dollar, in contrast to the maintained rate of approximately 30.8 over the past year.

Prime Minister Mostafa Madbouly praised these steps, emphasizing the importance of unifying the exchange rate of the Egyptian pound to alleviate the heightened demand for foreign currency.

He further highlighted that eliminating the parallel market will help mitigate inflation.