Egypt expects that more than 500,000 cars will be imported into Egypt by Egyptian expats who will take advantage of the initiative, Maait said in an interview with Asharq Business on the sidelines of the annual meetings of the International Monetary Fund and the World Bank Group in Washington.

Last week, the Egyptian Cabinet approved a draft law allowing Egyptians living abroad, who number around 14 million according to 2021 official figures, to import to Egypt one private car per person free of customs duties and taxes, including the value-added tax (VAT).

According to the draft law, expats can invest the value of saved customs duties and taxes in foreign currency in a five-year certificate of deposit (CD), but without earning interest.

These expats will be able to recover the deposit in Egyptian pounds at its price at the end of the period. The exemptions are valid for a four-month period starting on the day the law comes into effect.

In his interview, Maait noted that the duration of the exemption was limited to four months in order not to adversely impact the government's strategy of localising car manufacturing.

The initiative has garnered special interest among Egyptian expats in the Gulf, who total more than 3.5 million, he noted.

Customs and tax duties that are currently imposed on vehicles imported into the country could exceed more than EGP 3 million, he said.

Egypt has struggled with a drop in foreign currency reserves (NIRs) in recent months since the outbreak of the war in Ukraine.

Egypt's NIRs registered $33.198 in September, down from $40.994 billion in February at the time of the start of the Ukraine crisis.

To increase foreign currency reserves, the state-owned National Bank of Egypt (NBE) and Banque Misr doubled interest on dollar-denominated bank certificates, a step that analysts say could attract interest from Egyptian expats.

Egyptian expats who want to take advantage of the initiative should be above 16 years of age and have legal residence abroad.

They must also have an overseas bank account that is at least three months old.

Expats' spouses and children are exempted from this requirement, the statement added.

The initiative would only apply to new cars that are manufactured in 2022 or second-hand cars that are no more than three years old in order to protect the environment, Minister of Emigration and Expatriate Affairs Soha El-Gindy said in TV remarks last week.

If an expat does not import a car within a year after depositing the money to the finance ministry, they will be able to immediately recover the deposit in foreign currency, according to the draft law.