The governor of the Central Bank of Egypt Tarek Amer (Reuters)
The Central Bank of Egypt (CBE) will now allow exporting companies to deposit one million US dollars, or equivalent of foreign currencies, monthly at local lenders, cancelling the daily cap, the bank said Monday on its website.
The CBE's recent decision came three weeks after it raised the limit on dollar deposits for staple imports from $50,000 to $250,000 monthly in an attempt to eradicate the foreign currency black market that reportedly witnessed a hike in the exchange rate of greenback to register EGP 9 on Monday.
The companies will be required within three months to generate export revenue at least equal to the sum they deposited.
State news agency MENA cited an anonymous CBE official on Tuesday who denied any step being taken by the bank toward the devaluation of the local currency.
This contradicts projections made by bankers and economists, surveyed by Ahram Online, that the Egyptian pound would be depreciated to 8 against the dollar.
The CBE has already imposed strict regulations on financing imports to prioritise essential, non-luxury goods, aiming to reduce Egypt's import bill by $20 billion this year after reaching $80 billion in 2015, according to statements made by governor Tarek Amer in an interview with Reuters.
In a report handed to the Egyptian Premier, CBE said it injected around $14 billion dollars into local banks over the past three months to facilitate import activity and curb inflation on essential goods.
Amer expected the country’s foreign reserves to increase to $17.4 billion from the current $16.4 billion after the CBE received a $900 million loan from China earlier this month.