Egypt raises cap on forex deposits for imports of essential goods

Tuesday 26-01-2016 04:58 PM
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CAIRO (Reuters) - Egypt's central bank said on Tuesday it would raise its cap on foreign currency deposits to $250,000 a month specifically for imports of food, capital machinery, manufacturing components and medicines to help them settle their bills.

In February the central bank imposed capital controls and limited dollar-denominated deposits to $50,000 a month to crack down on a black market for dollars.

But the move meant many importers could no longer get hold of enough foreign currency to pay for foreign goods, which piled up at ports.

The central bank said in a statement that the $50,000/month cap would remain in place for ordinary deposits not used for imports of the listed "essential goods".

Egypt's economy has been struggling since a mass uprising in 2011 against autocrat Hosni Mubarak drove away tourists and foreign investors - two big sources of hard currency.

The country, which relies heavily on imports of essential goods, had been rationing dollars through weekly auctions. Its foreign reserves have tumbled from $36 billion in 2011 to $16.445 billion as of the end of December.

(Reporting by Asma Alsharif and Nadia El Gowely; Editing by Hugh Lawson)

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