CAIRO, Aug 21 (Aswat Masriya) - Egypt’s President Abdel Fattah al-Sisi approved on Sunday the amendments of a central bank law that imposes harsher punishments on illegal foreign currency traders, amid wider efforts to crackdown on the black market.

The House of Representative approved earlier in August.

The House has set prison sentences between three to 10 years and fines up to EGP five for foreign currency trading on the black market. 

The amended law imposes prison sentences, between six months and three years, and fines that can reach up to EGP five million on banks that violate the provisions relating to foreign currency dealings. 

The central bank has been trying to control the dollar exchange rate on the black market. It has closed down a total of 53 foreign exchange bureaus since the beginning of the year, which it blames for growing pressure to devalue the currency.

The central bank devalued the pound by about 14 per cent to reach EGP 8.78 against the dollar in March in an effort to close the gap between the official and parallel rates but the move failed to boost dollar liquidity or close the gap. 

The widening gap between the official and the unofficial dollar rates persists despite the central bank's attempts to narrow it. The pound changes hands at more than EGP12 per dollar, while banks kept the pound steady at EGP 8.88. 

Years of political turmoil have taken a toll on Egypt’s economy, halving the state’s foreign reserves and driving away tourists and investors.

The country is currently facing an acute foreign currency shortage due to pressures on its foreign reserves after years of political turmoil. 

Egypt’s foreign reserves sharply fell by $2 billion reaching $15.536 billion at the end of July, down from $17.5 billion in June.