The Central Bank of Egypt (CBE) decided on Sunday to extend the exclusion period for rice, lentils, and beans from their 100% cash cover for another year, ending 15 March 2023.
The CBE has extended the exclusion period twice in the past two years since it first introduced the exemptions in 2019.
The CBE confirmed in a letter to banks that this decision applies to the import operations of all companies, taking into account the credit study conducted by each bank.
It indicated that this comes in light of following-up with the needs of the Egyptian market and its keenness to facilitate import procedures to meet the needs of citizens.
The CBE recently decided to stop dealing with collection documents in the implementation of all import operations and to work with documentary credits only while allowing the acceptance of collection documents received from goods that were already shipped before the issuance of this decision.
It confirmed that this comes within the framework of the Cabinet’s directives regarding the governance of the import process and the activation of the system of pre-registration for shipments, which will be applied compulsorily as of the beginning of March 2022.
The decision excluded shipments received by express mail and up to $5,000, or its equivalent in foreign currencies, from the application of this decision.
The CBE also decided to exclude drugs, serums, and their chemicals, tea, meat, poultry, fish, wheat, oil, powdered milk, infant formula, lentils, butter, and corn from the application of the decision.
Subsidiaries of foreign companies may also be exempted from this decision within the scope of import operations from the parent company and its groups only.
The CBE also instructed banks to reduce all commissions for documentary credits to be like commissions for collection documents and also directed them to increase the existing credit limits for customers and open new limits for new customers in proportion to their import volume and open all documentary credits required of all customers upon their request.
The Federation of Egyptian Banks said that the CBE’s decision is a banking regulatory measure issued in line with the recent decisions of the Cabinet regarding the governance of import procedures and to complement the system of pre-registration of shipments, with the aim of raising the level of goods received from abroad to protect the health and money of citizens as well as the governance of the foreign trade system and the protection of industry for patriotism and preservation on the state’s sovereign resources.
It explained that, starting from the date of the issuance of this decision, banks will deal with it in accordance with the determinants approved by the CBE in the implementation of import operations to work with documentary credits, pointing out that with regard to goods previously shipped before the issuance of this decision, it is allowed to deal with them through collection documents based on the customer’s request.
