Egypt's Central Bank to allow foreign currency facilities for importers
Egypt's central bank will permit banks to refinance importing operations for clients by providing “temporary facilities in foreign currency” based on the bank's credit evaluation.
The information was provided in a statement dated 14 January and posted on the central bank’s website on Monday.
The central bank law of 2003 allowed such financing only to borrowers who could show they had enough foreign currency resources to repay them.
“They are relaxing the rules for trade financing by allowing banks to lend to clients who don’t possess the foreign exchange resources. It will allow them to get around the shortage of foreign exchange liquidity, so that business activities are not interrupted,” said Mohamed Abu-Basha, an economist at Cairo-based investment bank EFG-Hermes Holding SAE.
“This might help ease the situation a bit, but the problem will remain as there’s a growing gap between the demand and supply of foreign exchange in the market.”
- Could a GCC bankruptcy protection law help SME development in the Middle East?
- Why the World Bank is ill-prepared when it comes to dealing with the Middle East
- Time to burst that Expo 2020 bubble, can Dubai survive with $103 billion in debt?
- Meet 'Mr. Five Percent': the man who bought Syria one bank at a time
- Why Lebanon needs more Arab investment
- Egypt's Central Bank sells banks $600 million to cover key imports
- Syria says foreign exchange market stable
- Turkey Central Bank intervenes in foreign exchange market
- Turkey’s Central Bank protects liquidity with forex adjustments
- Central Bank of Turkey purchases foreign currency to reduce excessive volatility