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Thursday, 2 June 2022

More trouble ahead for importers as customs exchange rate rises

Leading the airwaves yesterday: The Customs Authority’s decision to hike the USD customs exchange rate to EGP 18.65 this month had everyone talking on the airwaves.

Prepare for more inflation: Prices of imported products will rise 7-9% due to the decision, Emad El Qenawy, head of the importers division at the Federation of Egyptian Chambers of Commerce (FEDCOC), told Yahduth Fi Masr (watch, runtime: 6:06). “The rise would come on the back of a hike in the cost of [imported] goods plus [existing] VAT,” El Qenawy said on the decision.

With prices sky high, demand is already low: People aren’t buying imported electronics, Ashraf Helal, head of the electrical appliances division at FEDCOC, told Ala Mas’ouleety’s Ahmed Moussa, describing the market as in “recession” (watch, runtime: 2:12).

L/Cs are already making things difficult enough: Many cargoes are stuck in customs due to difficulties in opening letters of credit (L/Cs), Helal said. New rules introduced by the central bank in March require importers to use L/Cs to import goods, instead of documentary collection. L/Cs are a more expensive, complex, and harder-to-access form of trade finance than documentary collection.

Also opining on the news last night: Mohamed El Bahy, head of the Federation of Egyptian Industries’ tax and custom committee, was on Masaa DMC (watch, runtime: 6:49), while Alaa Al-Sabaa, member of the automotive division at FEDCOC, phoned in to Ala Mas’ouleety (watch, runtime: 4:32).

Also on the airwaves last night:

  • Development finance: The Japan International Cooperation Agency (JICA) will assist with the rollout of the government’s universal health insurance system under a two-year agreement signed yesterday. (Al Hayah Al Youm | watch, runtime: 3:23)
  • Mining: The awarding of eight gold and mineral exploration licenses in the Eastern Desert earned a mention. (Al Hayah Al Youm | watch, runtime: 3:01)
  • Presidential pardons: Yahia Hussein Abdel Hady yesterday became the latest detainee to receive a presidential pardon following years of being held in pre-trial detention. A new list of names will be released today. (Al Hayah Al Youm | watch, runtime: 7:31) (Yahduth Fe Masr | watch, runtime: 5:16)

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