One of our frustrations during our trip to Egypt was that very few people seemed to have the correct change. This was not just the case in tiny market stalls, but also in restaurants, hotels, and believe it or not, major tourist sites. The reason for this was something that has puzzled me ever since, so much so that, late last Friday night, I ended up asking a woman behind the bar if she had the answer (she didn't, but was polite enough to indulge my drunken ramblings until she spotted another customer). As far as I can work out, there are three explanations:
1) The locals were using a professed lack of change as an excuse to try and sell us something else. I can see that being the case for stalls and even restaurants, but I don't know that hotels and tourist sites would have much to gain from this strategy. And really, market sellers will try and get you to buy something else whether they have change or not.
2) The businesses are too small to have the correct change in a lot of situations. If you think about it, how often, in a transaction between two individuals (for example, between you and your friend) do the buyer and seller have the correct change? Maybe it's better to think of the Egyptian economy as predominantly consisting of a collection of individuals. Yet the businesses in China were often tiny as well, and we had few problems getting change there. Is there some critical mass of medium-sized businesses that you need to keep the change flowing?
3) Perhaps there exists some optimal relationship between the denominations of the notes and prices in the economy, and the Central Bank of Egypt has not found it. But this seems unlikely - sure the 200 pound note is a pest to break, but there seems to be plenty of 5 pound notes and 1 pound notes floating around, just rarely when you need them. (Admittedly, the half-pound and quarter-pound notes were harder to find.)
Verdict? I think number 2 is the most likely explanation, although I think number 1 may have a little to do with it.
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