Egypt’s central bank (CBE) said Tuesday it cleared the backlog of funds it owed foreign investors who sold local stocks and bonds in the aftermath of the country’s 2011 uprising, marking the first step by central bank Governor Tarek Amer to alleviate the shortage of dollars.
The central bank repaid US$547.2 million, representing “all the pending backlog to date,” it said in an e-mailed statement Tuesday.
The decision comes in the first week of Amer’s tenure as the government seeks to restore investor confidence battered by almost five years of political unrest. The Egyptian pound is under pressure as foreign reserves tumbled to less than half of their level prior to the so-called Arab Spring, while tourism is struggling to recover in the wake of the downing of a Russian passenger jet in October.
The move “definitely signals more liberal foreign exchange management in Egypt,” Bloomberg quoted Cairo-based Hany Farahat, senior economist at investment bank CI Capital Holding, a subsidiary of the country’s biggest listed lender, as saying. “It’s a significant positive catalyst, after a few months of none.”
The central bank said last June it repaid half of the backlog without specifying an amount.