Cairo: Egypt’s central bank allowed lenders to sell dollars to clients seeking to repatriate profits, further easing currency restrictions in an effort to bring back foreign investors and revive the economy. Stocks surged.
Banks were given the green light to sell 50 per cent of excess foreign currency after meeting the needs of priority importers, according to seven bankers who said they received verbal instructions from the central bank on Monday. Central bank officials weren’t available for comment when contacted by Bloomberg.
Lenders were instructed to sell the remaining 50 per cent in the interbank market, according to the bankers, who asked not to be identified because they aren’t allowed to disclose the information publicly. Guidelines also allow banks to refinance temporary overdrafts, the bankers said.
Foreign investors have cited difficulties in profit repatriation as a major reason they have avoided North Africa’s biggest economy since the 2011 uprising that ousted longtime ruler Hosni Mubarak. They have started coming back since authorities floated the pound on Nov. 3. Foreign holdings in government debt grew to between $700 million and $900 million over the past few weeks from $50 million in July, officials have said.
The benchmark EGX 30 Index climbed the most among more than 90 gauges tracked by Bloomberg, adding 2.6 per cent as of 10:40am in Cairo. Since the pound was floated, the gauge has rallied 34 percent — compared with a 3.4 per cent decline for the MSCI Emerging Markets Index.
The pound advanced 0.6 per cent to 17.775 per dollar, rising for the first time in four days, according to National Bank of Egypt prices.