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> Who are you going to borrow egyptian pounds from to pull this off? For a specific answer, that’s a question for another HN’r to answer. Broadly though, a bro

> Who are you going to borrow egyptian pounds from to pull this off? For a specific answer, that’s a question for another HN’r to answer. Broadly though, a brokerage that supports FOREX will let you short currencies and potentially buy call or put options on the given currency pair. If I was planning on doing this, I’d keep it a secret and you wouldn’t hear me post about it so quickly, until I already had built a position. > Usually you can't pull that off because the central bank won't sell foreign currency to just anyone. You have to have a valid reason, or be well connected. No, you can look it up for yourself anywhere and see that’s the official exchange rate, not a “special” exchange rate like Venezuela has (which people friendly with the government make money arbitraging). Don’t be so quick to be dismissive. It’s something for curious local Egyptians to evaluate and consider.

gruez 3y ago
>Broadly though, a brokerage that supports FOREX will let you short currencies and potentially buy call or put options on the given currency pair. That might work if you're trading euros or japanese yen, but can you do it for egyptian pounds? For instance, IBKR does a bunch of currencies but not EGP https://www.interactivebrokers.com/en/trading/products-spot-currencies.php https://www.interactivebrokers.com/en/trading/products-spot-... Wise will let you convert from USD to EGP, but not the other way around. >Don’t be so quick to be dismissive. It’s something for curious local Egyptians to evaluate and consider. Why do you think the "black market rate" exists in the first place then? If you can really walk in a bank and get $1 USD for 31 egyptian pounds no questions asked, why would there even be a black market where people are asking for 40 egyptian pounds for the same dollar?
- from 3y ago
  You can speculate on nonconvertible currencies with non-deliverable forwards. This is not offered by most retail brokerages.
  - gruez 3y ago
    Who's going to be your counterparty and why would they give you the "official" rate? The whole reason why there's an "official" rate and a "black market" rate is that the government has mandated one rate, but the broader market disagrees and has agreed on a different rate. The two never converge because the government requires you to jump through hoops to get the official rate, so people can't arbitrage the difference.
    - from 3y ago
      Banks I assume? You would get the market rate, not the official rate. Edit: yes, exactly
      - gruez 3y ago
        > Banks I assume? You would get the market rate, not the official rate. So where's the money making opportunity? You're short selling at the market (ie. non-official) rate, and have to buy back at the market rate. The only way you'll make money is if the market rate drops even more, but whether that happens is uncertain. This just sounds like run of the mill currency speculation.

gruez 3y ago

>Broadly though, a brokerage that supports FOREX will let you short currencies and potentially buy call or put options on the given currency pair. That might work if you're trading euros or japanese yen, but can you do it for egyptian pounds? For instance, IBKR does a bunch of currencies but not EGP https://www.interactivebrokers.com/en/trading/products-spot-currencies.php https://www.interactivebrokers.com/en/trading/products-spot-... Wise will let you convert from USD to EGP, but not the other way around. >Don’t be so quick to be dismissive. It’s something for curious local Egyptians to evaluate and consider. Why do you think the "black market rate" exists in the first place then? If you can really walk in a bank and get $1 USD for 31 egyptian pounds no questions asked, why would there even be a black market where people are asking for 40 egyptian pounds for the same dollar?

from 3y ago
You can speculate on nonconvertible currencies with non-deliverable forwards. This is not offered by most retail brokerages.
- gruez 3y ago
  Who's going to be your counterparty and why would they give you the "official" rate? The whole reason why there's an "official" rate and a "black market" rate is that the government has mandated one rate, but the broader market disagrees and has agreed on a different rate. The two never converge because the government requires you to jump through hoops to get the official rate, so people can't arbitrage the difference.
  - from 3y ago
    Banks I assume? You would get the market rate, not the official rate. Edit: yes, exactly
    - gruez 3y ago
      > Banks I assume? You would get the market rate, not the official rate. So where's the money making opportunity? You're short selling at the market (ie. non-official) rate, and have to buy back at the market rate. The only way you'll make money is if the market rate drops even more, but whether that happens is uncertain. This just sounds like run of the mill currency speculation.