Following the announcement by the Prime Minister of Egypt concerning the abolition of the mandatory use of letters of credit, this has now been backed up by the Central Bank of Egypt in a press release. Starting today, the threshold value will be increased from 5,000 to over 500,000 U.S. dollars. Anyone sending goods of a lower value to Egypt is already exempt from the letter of credit obligation. By December 2022, it will be abolished completely. According to the Central Bank’s communication, the measure is intended to stimulate the economy in the medium term.
On February 12, 2022, the Central Bank of Egypt issued a guideline in relation to the control of import processes to supplement the activation of the Advance Cargo Information System (ACI). From the start of March, Egypt only accepted letters of credit (LCs) for the execution of import transactions. This was intended to increase the quality of goods imported from abroad and to guarantee control of the international trade system and the protection of local industry. According to the latest announcements however, this measure will now cease by the end of the year.
