Egypt Covers All Dollar Backlogs for Foreign Investor Repatriations

Egypt’s Central Bank said on Tuesday it had covered the entire backlog of dollars owed to foreign investors seeking to repatriate funds from the country but did not say how much money was involved.

Years of political turmoil, opaque bureaucracy and continued dollar shortages have unnerved foreign investors in Egypt, though authorities say they are working hard to improve the business climate.

In a push to restore confidence in the economy, authorities opened a repatriation scheme in March 2013 guaranteeing foreign investors in Egyptian stock and government bond markets access to dollars despite the severe shortages of the U.S. currency.

“The Central Bank of Egypt announces the coverage of the remaining foreign investors’ backlogs today after previously covering 50 percent of these backlogs on March 13,” the central bank said in a statement.

On March 13, the bank had said it would cover the remaining 50 percent in the near future.

The bank said the backlogs had accumulated because foreign investors had refrained from using the central bank’s repatriation mechanism.

Egypt’s foreign reserves fell to a critical low of $13.5 billion last year, down from $36 billion before the uprising that toppled autocrat Hosni Mubarak in 2011. They stood at $17.31 billion at end-February.

The central bank has been holding routine dollar auctions to commercial banks to slow the slide in the Egyptian pound.

At an auction on Monday, the central bank sold $38.3 million to banks with a cut-off price of 6.9575 pounds. On the black market the dollar was offered for 7.39 pounds on Monday.

Source: Reuters