The crisis is back Hard currency in Egypt It has reappeared in the past two weeks, after some banks stopped opening new letters of credit or collection documents for importers, due to the scarcity of the dollar in the region’s largest market in terms of the number of consumers.
Was Central Bank of Egypt Last October it “gradually” canceled the provisions for the use of documentary credits in import financing transactions, leading to their complete abolition in December, and returning to the old system through “collection documents”.
This coincided with exchange rate liberalization and banks began supplying dollars to importers. However, this has changed in the past two weeks due to a severe shortage of hard currency, which has resulted in an almost complete halt in import operations, except for fuel and food.
One of Egypt’s major appliance importers told Al-Sharq, on condition of anonymity, that “the (import) process has been completely halted for two weeks, as there is no hard currency, and banks are content to verbally agree , but it’s not implemented, to come back and state that it’s progressing according to priority.” Parallel to the sharp increase in the price of the dollar in the parallel market .. and we do not know what to do.
Al-Sharq sent a text message to the Central Bank of Egypt to get its opinion on the availability of hard currency for importers, but did not get an immediate response.
funding gap
Egypt failed to reach an agreement with International Monetary Fund To obtain direct financing of 3 billion dollars, within lines of credit exceeding 9 billion dollars, to attract foreign investment to the country, particularly in the stock market, from which more than 20 billion dollars of hot foreign money from the Russo-Ukrainian war, according to statements by Finance Minister Mohamed Maait.
Egypt needs $28 billion through the end of 2023 to refinance its outstanding debts, pay interest on debt and finance its current account deficit, according to Deutsche Bank, plus an additional $20 billion a year. following. Egypt’s net international monetary reserves, which are just over $33 billion, cannot bear this burden. This has caused fears that Egypt will continue to need to tap into debt markets.
