24/01/2024
1698 times read
24/01/2024
1698 times read
KUWAIT CITY, Jan 24: The illicit money transfers within Kuwait's black market have recently experienced a notable surge, impacting approximately 11 countries due to speculative activities outside the official system. Prominent currencies involved in this black market expansion include the Egyptian pound, Indian rupee, Philippine peso, Bangladeshi taka, Lebanese pound, and Syrian pound. Even currencies from countries like Iran exhibit dual pricing, albeit with narrower margins.
It's noteworthy that the list of speculative currencies extends beyond nations facing severe economic pressures, encompassing those with weak banking infrastructure or where primary exchange companies have closed transfer avenues. This situation prompts citizens to turn to currency traders offering favorable rates and sometimes added conveniences in terms of time and effort.
Opportunities for the black market thrive particularly in regions facing political or military tensions, such as Syria, Iran, Yemen, Sudan, Libya, and Iraq. Exchange companies, facing restrictions in dealing with these countries, have witnessed a significant decline in customer transfers. Black market traders have reportedly accounted for around 90 percent of operations, impacting the financial books of these companies due to increased operational costs and reduced income compared to earlier periods.
Kuwait hosts about 500 exchange companies, with only approximately 38 registered with the Exchange Union being the most affected by the black market's growth. Reports indicate an observable rise in the activities of currency traders, especially in establishments frequented by Asian nationals. Some social media posts highlight the availability of delivery services offering better rates than official exchange companies, along with additional benefits like discounted transfer fees.
Transfers through the black market consistently maintain lower price margins than the official market, varying between countries. The price gap can range from narrow to as wide as 50 percent, exemplified by the Egyptian pound due to the escalating dollar prices in the black market. This phenomenon, exploited by speculators to profit from the dollar shortage, results in substantial disparities between official and parallel markets.
The pronounced differences in currency prices on the black market, surpassing even the expectations of international financial institutions, have led exchange companies to repeatedly bring this matter to regulatory authorities. They emphasize the urgent need for intervention to combat these operations, especially considering the potential implications of money laundering.
The evolving landscape of money movement within this market has become increasingly complex, extending beyond expatriates to include Kuwaitis with financial ties to countries experiencing the emergence of a black market in their currencies. The overall impact is discernibly negative on the economy and the operational landscape of exchange companies.