Egypt raises dollar deposit caps for imports of essential goods

Egypt’s central bank announced Tuesday that it would raise the monthly limit to $250,000 from $50,000 for importers of food, machinery, spare parts, capital goods and medicine. It removed a daily ceiling for the same group of importers as long as they do not exceed the monthly cap.

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.

The central bank further said it would keepy the $50,000 monthly limit in place for ordinary deposits not used for imports of the listed “essential goods”.

Under Governor Tarek Amer, who took charge of the central bank in November amid a national debate on currency policy, authorities have taken steps to bolster confidence in the Egyptian pound, including repaying foreign portfolio investors and introducing tighter regulations on imports. The dollar deposit restrictions were introduced by Amer’s predecessor to crack down on black market trading.

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.