CAIRO: Egypt has issued a ministerial decree immediately banning the export of gold in all its forms, including jewelry and ornaments, until June 30, the official news agency MENA said on Sunday.
"This decision, which comes in light of the exceptional circumstances the country is passing through …, is to preserve the country’s wealth until the situation stabilizes," MENA said.
Egypt’s currency has come under pressure after some of the country’s main sources of foreign currency, including tourism and foreign investment, collapsed after the protests that ousted President Hosni Mubarak erupted on Jan. 25.
On Monday, jewelers reported confusion in the local gold market in terms of prices and transactions. One jeweler told Daily News Egypt that other traders were refusing to handle the usual transactions, specifically purchases. Those willing to buy wholesale gold were doing so with prices significantly less than world markets’.
The statement made by MENA did not reveal if the ban included gold from mining, but an official from the Sukari gold mine of Centamin Egypt said that he had full confidence the mine’s operation would not be affected by the order.
“For Centamin, this is not a problem. I know 100 percent that this is not a problem for us,” Youssef el-Raghy, managing director for the Sukari gold mine, told Reuters.
He added that he saw the decree aimed at individuals and not towards producers of gold in Egypt.
Some bankers have been reported as saying that the verdict was put in place as a way to stop the individuals from smuggling funds under the radar and not as a way to disrupt the production of gold within the country and stop a major capital outflow.
Many former government officials and businessmen are currently under investigations for illegal activities including squandering public funds and profiteering, and many of which have had assets frozen by the Prosecutor General.
“It is most likely aimed at the big guys—the top officials and businessmen who are under suspicion,” John Sfakianakis, a Riyadh based economist with Bank Saudi Fransi told Reuters.
“They are blocking capital flight in a new asset class,” he added. –Additional reporting by Daily News Egypt.