Cairo, Egypt: The Central Bank Governor of Egypt -Tarek Amer, noted that new regulations would be implemented, which will require the importers to use letters of credit by next month. Besides several complaints from the business firms as well as traders, the new rule will be in effect from March.
The traders and the business firms expressed their fears that this new regulation could inflate their costs.
Governor stated, “The businessmen must reconcile their situations and not waste time in controversies that have no connection to the stability of country’s foreign trade and its sound performance”.
This statement comes after the Central Bank released instructions that were circulated by the Egyptian businessmen and traders. The instructions were for the banks, ordering them to only accept the letters of credit from importers. These regulations were further also covered by the local media of the middle east nation.
At the present time, the importers are only accessible to utilize a “cash-against-documents system”, which is being supported by the traders as they think that it demands less payment in advance.
A complaint was made in a letter by the group of trade and business associations to the Prime Minister of Egypt, Mostafa Kamal Madbouly. The letter notes that this new regulation might inflame the supply chain programmes while giving huge damage to the competitiveness. They fear that it could also delay the import shipments.
The middle east country currently is struggling to retain a rising import bill as well as a present account deficit which has broadened to $18.4 billion in the fiscal year of 2020 to 2021 from $11.4 billion the last year.
The Central Bank of Egypt was founded in the year 1898 is 100% under state ownership. It is responsible for the regulation of banks and the banking system of Egypt.
