Egypt's central bank lifts foreign currency cap on companies - state newspaper

Wednesday 09-03-2016 02:18 PM

American dollar notes are displayed in this photo illustration in Johannesburg August 13, 2014. REUTERS/Siphiwe Sibeko

CAIRO, Mar 9 (Aswat Masriya) - The Central Bank of Egypt (CBE) lifted a cap on cash deposits and withdrawals that companies can make in foreign currencies on Wednesday, state run newspaper Al-Ahram said.

Aswat Masriya was not able to reach the CBE in time for publishing. The news comes one day after the bank lifted the cap on cash deposits and withdrawals that individuals can make in foreign currencies.    

In a bid to put an end to dollar trading on the black market, the CBE introduced a cap on foreign currency deposits for individuals and companies in February 2015, limiting them to depositing up to $10,000 daily and up to $50,000 a  month.  

In January, the bank raised the ceiling for deposits made by companies that import basic goods, allowing them up $250,000 monthly, with no limit on daily deposits. Last month, the bank raised the maximum limit to $1 million for deposits made by exporting companies that need to import goods for their production.   

Although heavily reliant on imports for food and energy, Egypt is facing a dollar shortage with sources of hard currency inflows like tourism and investment slowing down.    

Years of political turmoil led to a drop by more than a half of Egypt's foreign reserves in the years following the popular uprising in January 2011, which ended the rule of President Hosni Mubarak. The instability that ensued has driven tourists and investors away.  

The Egyptian state is facing pressures depreciate the pound, with analysts saying Egypt can no longer support the current price of the pound, set by the CBE at 7.73 to the dollar.

Egypt's foreign reserves inched up at the end of February by 56 million dollars reaching 16.533 billion, still less than half of the foreign reserves Egypt had before Mubarak's removal when they were almost $36 billion.   

Egypt has been scrambling to collect money lately, signing loan agreements with the World Bank and the African Development Bank (AfDB) in December.

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