Egypt to gradually repeal letters of credit system for imports

The Central Bank of Egypt (CBE) announced on Thursday that it would begin the process of gradually repealing the use of letters of credit for import finance system, ensuring the completion of removal by next December.

“…, the CBE will begin the process of gradually repealing Letter No. 49 of February 13th, 2022 that mandated the use of Letters of Credit for import finance, and the CBE will ensure the completion of removal by December 2022.” the central bank said in a statement.

“This will serve as a catalyst for the rejuvenation of economic activity in the medium term.”

In February, the central bank issued new rules obliging all importers to use letters of credit to finance their imports, eliminating the earlier collections system that was in force for many years. It excluded foreign firms and subsidiaries from the rules.