Egypt eases restrictions on foreign currency for importers

Cairo: Egypt will allow importers to keep larger amounts of foreign currency in banks, the Central Bank said today, in a move that will be welcomed by businesses.

Deposits of the equivalent of USD 250,000 a month, up from a previous limit of USD 50,000, will now be allowed for the import of basic food commodities, industrial equipment, raw materials and medicines, it said.

“It’s positive news for the business community,” said Mohamed Abu Basha, an Egyptian economist at regional investment giant EFG Hermes.

“The central bank has lately shown itself ready to resolve the issue of dollar shortages in a more structural way… Taken together with recent directives, this will ensure that Egypt is able to import necessary items,” he said.

The bank imposed the limits last year as part of moves to shut down a black market for dollars, but the restrictions left many importers unable to obtain enough foreign currency to pay for imported goods.

Egypt’s economy is still reeling from years of turmoil following the 2011 toppling of longtime autocrat Hosni Mubarak.

The government is trying to send the message that the country is open for business by launching a series of ambitious mega-projects and pushing through a host of tough measures, fuel subsidy cuts and property tax law amendments. President Abdel-Fattah el-Sissi, a former general who led the army’s overthrow of the Islamist Mohammed Morsi in 2013, has staked his legitimacy on economic revival and stabilizing the country.

But Egypt has struggled to combat Sinai-based insurgents who have carried out attacks across the country, scaring off foreign investors and tourists.