Banks spent USD 2.49 bn on financing imports from 3 to 15 November -CBE
Egyptian banks have provided USD 2.492 bn in financing to importers of foodstuffs, medications, and production inputs in the period from 3 to 15 November, the central bank said. USD 1.459 bn went to finance intermediate goods and production inputs, USD 414.65 mn to foodstuffs, USD 97.65 mn to import medications since the float of the EGP, and the remainder on other goods. The financing came through short-term loans to importers and letters of credit.
This comes as the CBE apparently told bankers that they are allowed to begin financing imports of non-essential goods on Sunday, six banking sector sources told Arabic Reuters on Friday. These “verbal instructions” by the CBE come with the caveat that the liquidity must come from the interbank market. The interbank requirement will discourage banks from financing non-essential imports, according to senior private sector banker. Importers complained to Reuters on Wednesday that they have been forced to return to the parallel market as banks have been withholding USD for non-essential, despite statements from GB Auto (one of the largest buyers of FX from the parallel market) last week that they had begun completely relying on the banking sector.
Meanwhile, the CBE is apparently holding talks with the Social Fund for Development (SFD) to shield SMEs from the effects of the EGP float, said SFD head Soha Suleiman, who gave no further detail on the talks.