The CBE set a limit for foreign exchange companies’ issued and paid capital to be at least EGP 25 million.

The central bank granted companies a one-year timeframe to adhere to the new regulations, except for the capital limit, which must be fulfilled by 15 September 2023.

Licensing rules

In order to obtain primary approvals, companies are required to submit an application to the CBE’s board of directors. The board will review and consider the application within 90 days, which may be extended by the bank for an equivalent duration if necessary. 

This approval is typically provided within a six-month timeframe, which can be extended for an additional six months if required.

In the event of an application rejection, applicants will be promptly notified within 30 days.

The CBE set out rules stipulating that they may close an exchange company if it:

• Suspends operations or merges with another exchange company without approval from the CBE;

• Fails to meet obligations, or if it is bankrupt or liquidated;

• Adopts a policy that harms the economy or destabilises the foreign exchange market.

A troubled sector

Egypt's net foreign assets deficit surged to $17.33 billion in March 2023, up from $7.09 billion in the same month a year earlier, according to CBE data.

This deficit arose out of the global economic crisis sparked by the start of the Ukraine war in early 2022. Since then, the value of the pound has lost around 100 percent of its value and is now traded at around EGP 31 against the dollar.

The last foreign currency crisis in Egypt was in 2016, when the CBE decided to float the pound.

Many companies were accused of manipulating exchange rates and the CBE closed 53 foreign exchange companies.

However, the supply of foreign currency stabilized and the pound’s value settled at around EGP 16 against the USD.