Egypt's central bank canceled letters of the credit system for imports

Posted on January 3, 2023   |  

Egypt's central bank canceled the use of letters of credit for imports, which was one of the several needs by the International Monetary Fund for a $3 billion support package approved this month.

The government will now permit direct payment instead it will allow approval of documentary collection to carry out all import operations

In late October, the Central Bank of Egypt (CBE) began eliminating the use of the letters of credit system for import finance.

The imports opposed the letters of the credit system and stated, it would worsen existing supply chain problems, and increase production costs and inflation.

As a result, in May, Egypt's president decided to exempt importers of production supplies and raw materials from the letters of credit requirement.