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Wednesday, 29 November 2017

CBE lifts caps on USD deposits and withdrawals

CBE lifts caps on USD deposits and withdrawals: The central bank announced yesterday that it has lifted all previously-imposed restrictions on USD deposits and withdrawals for importers of non-essential goods. The central bank had set a deposit limit of USD 10k a day to a maximum of USD 50k a month (and a withdrawal limit of USD 30k a month) back in 2015 to control the flow of foreign currency at a time of severe shortage. “We saw it as appropriate to remove the caps today because the market has strengthened, our foreign-currency resources have increased,” CBE sub-governor Rami Aboul Naga tells Bloomberg.

“The move is another sign that bank liquidity is improving as a result of Egypt’s USD 12 bn, three-year IMF program and a currency flotation that halved the EGP’s value and helped crush the black market for USD,” Reuters notes. FX reserves have been on a steady rise since then, climbing to a high of USD 36.703 bn at the end of October. This continued improvement had prompted the CBE back in June to scrap all caps on overseas bank transfers, which had been set at USD 100k per client.

Analysts are nodding in agreement with the decision. Pharos Holding COO Angus Blair said the decision is “a confidence building measure that shows the private sector that things are back to normal.” The question now is, though, “whether this would have an impact on the exchange rate,” Naeem Brokerage’s head of research Allen Sandeep tells the newswire.

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