In a bid to support local manufacturing and better preserve its dwindling foreign currency reserves, the central bank of Egypt has in a statement said that it will tighten import regulations from January.
According to the Egyptian customs authority, the statement urges banks to obtain documents for imports directly from foreign banks, instead of obtaining them from the clients as is the practice currently. This is to stop any manipulation of receipts by importers.
Egyptian manufacturers have been pushing for stricter regulations to stop importers putting artificially low values on customs bills to avoid duties, a widespread practice that makes it difficult for local products to compete on price.
Beltone Financial Economist Ziad Waleed said Egypt had imports worth $60.8 billion in 2014/15, compared with exports worth $22.1 billion.
“They are just fine-tuning the present regulations amid the foreign currency shortage. This definitely could increase the pressure on importers,” he said.
Egypt, which depends on imports, has faced a currency crisis since a 2011 uprising drove foreign investors and tourists away. Hard currency reserves have more than halved $16.4 billion since then.
Importers will also have to provide 100 percent of the cash deposit on letters of credit for imports instead of the current 50 percent.
