Foreign trade transactions mark $35B since flotation

CAIRO – 31 May 2017: The total volume of foreign trade transactions done through the banking sector amounted to $35 billion since the Egyptian pound flotation on November 3 to May 25, the Central Bank of Egypt (CBE) said Wednesday.

Undersecretary of the CBE Tarek Fayed said in a statement that $25 billion has been paid in value of letters of credit (LoCs), and more $10 billion LoCs has been opened since then.

Egypt's foreign reserves have recorded their highest level since 2011, climbing to $28.64 billion at the end of April, up from $28.5 billion a month earlier.

The rise was mainly driven by fresh financing from multilateral banks: $1 billion from the World Bank, the second tranche of a $3 billion loan agreement, and a $500 million second tranche of a similar loan from the African Development Bank.

The value of the Egyptian pound has fallen against the U.S. dollar after the CBE’s free-float of the local currency in November from LE 8.88 to an indicative price of LE 13 per $1. The USD exchange rate has kept rising over the past few months, to reach a current average of LE 18.

Before the flotation, the CBE was giving priorities of foreign currency accesses to the essential sectors such as food, pharmaceuticals and petroleum imports, imposing a cap of $250,000 cap of deposits per month, to be later halted after the flotation.