The Central Bank of Egypt (CBE) announced the liberalization of the foreign exchange market on the 3rd of November 2016. Below is a summary of main decisions taken by the CBE in this regard.
Free Floating The Egyptian Pound
The Egyptian Pound is free floated so that its price vis-à-vis foreign currencies shall be determined according to demand and supply through interbank agreements. The CBE provided, as a jumpstart, a guiding non-binding exchange rate for foreign currencies at EGP1/14.27 US Dollar, 1 EGP/ Euro 15.8 and EGP1/Stirling Pound 17.7.
Cancellation Of Priorities List Regarding The Provision if Foreign Currency
CBE cancelled its previous decision dated 4 February 2013 requiring banks to give priority to imports of certain essential products in securing foreign currencies.
Removing Restrictions On Foreign Currency Deposits And Withdrawals
CBE confirmed its previous decisions issued on March 2016 removing any restrictions imposed on individuals and companies to make cash and wired deposit of foreign currencies. This is except for companies importing unessential products which will continue to be subject to a deposit cap of USD 10,000 per day or USD 50,000 per month.
Extending Banks' Working Hours
Banks will be allowed to operate until 9 p.m. every day, including Fridays and Saturday, with the purpose of executing foreign exchange transactions and transfers only.
Continuation Of Auction Mechanism
The CBE will continue to monitor currency market activities and hold multiple price auctions when necessary. The purpose of these auctions is to support the process of market price formation in the early days of adjustment.
Raising Cbe Rates By 300 Points
Deposit and loan interests were raised for one night by 300 points to reach 14.75% and 15.75% consecutively. Also, the CBE key policy rate was raised by 300 points to reach 15.25%, and the credit and debit prices was raised by 300 points to reach 15.25%.
Announcing A Complaint Hotline
Starting from Sunday, November 6th, 2016 a hotline shall be operated with the number of 16775 to receive complaints of the customers regarding the wrongful acts of banks and foreign exchange buraus, including, refusal to undertake sale and purchase transactions or trading in the black market.
For more information on this topic, please contact Dr. Fatma Salah, or Iman Nassar.