The Chinese website of World Agrochemical Network reported: On December 29, 2022, the Central Bank of Egypt announced the cancellation of the documentary letter of credit system and resumed the collection of documents to process all import business.
The Central Bank of Egypt stated in a notice published on its website that the cancellation decision refers to the notice issued on February 13, 2022, that is, to stop processing collection documents when implementing all import operations, and to process documentary credits only when conducting import operations, and exceptions to subsequent decisions.
This finally allows Egyptian importers to breathe a sigh of relief. You must know that because the importer cannot issue a letter of credit, a large number of imported goods are backlogged at Egyptian ports and cannot be cleared. Currently, the backlog of imported goods in Egyptian ports is worth about $9.5 billion. Moreover, after the implementation of the new letter of credit regulations in Egypt, due to the shortage of foreign exchange and the implementation of the letter of credit policy, Egyptian importers are facing many difficulties in obtaining raw materials and finished products, and some factories have completely or basically stopped production.
Recently, Egyptian Prime Minister Madbouly said that the government will solve the backlog of cargo at the port as soon as possible, and announce the release of the backlog of cargo every week, including the type and quantity of cargo, to ensure the normal operation of production and the economy.
In 2022, Egypt introduced a series of import control "Show Operations", which caused many foreign traders to complain. After finally adapting to the new ACID regulations, foreign exchange control came again!
On February 14, 2022, the Central Bank of Egypt announced that from March, Egyptian importers can only import goods using letters of credit, and instructed banks to stop processing exporters' collection documents. This decision is for the Egyptian government to strengthen import supervision and reduce dependence on foreign exchange supply.
On March 24, 2022, the Central Bank of Egypt once again tightened foreign exchange payments and stipulated that some commodities should not be issued documentary letters of credit without the approval of the Central Bank of Egypt, further strengthening foreign exchange control.
On April 17, 2022, the Egyptian General Administration of Import and Export Control (GOEIC) decided to stop importing products from 814 foreign and local Egyptian factories and companies. The companies on the list came from China, Turkey, Italy, Malaysia, France, Bulgaria, the United Arab Emirates, The United States, the United Kingdom, Denmark, South Korea and Germany and other countries.
From September 8, 2022, the Egyptian Ministry of Finance decided to increase the customs dollar price to 19.31 Egyptian pounds from that day onwards, and the exchange rate for imported goods from abroad will use this exchange rate. This new customs dollar rate reached a record high and was higher than the dollar rate set by the Central Bank of Egypt. According to the depreciation rate of the Egyptian pound, the import costs of Egyptian importers are constantly increasing.
On October 27, 2022, the Central Bank of Egypt issued a notice to increase the value of goods excluded from the decision from US$5,000 or its equivalent in other currencies to US$500,000 or its equivalent in other currencies, and announced the gradual removal of import restrictions It will be completely canceled until the end of the year.
Source: AgroPages
