This country announced the abolition of the documentary credit system and the restoration of collection documents!

Since Egypt announced in March this year that importers can only use letters of credit to import goods, a large number of imported goods have been backlogged at the port and cannot be cleared.

According to a report on the Egyptian portal MASRAWY on December 29, the Central Bank of Egypt announced today that it will cancel the documentary credit system and resume the collection of documents to process all import business.

The Central Bank of Egypt stated in a notice published on its website that the cancellation decision refers to the notice issued on February 13, 2022, that is, to stop processing collection documents when implementing all import operations, and to process documentary credits only when conducting import operations, and exceptions to subsequent decisions.

The Central Bank of Egypt had issued a notice on October 27, 2022, increasing the value of goods excluded from the decision from US$5,000 or its equivalent in other currencies to US$500,000 or its equivalent in other currencies, and announced the phase-out of imports Restrictions will be completely lifted until the end of the year.

It is understood that in March this year, the Central Bank of Egypt (CBE) decided that from March onwards, Egyptian importers can only use letters of credit to import goods, and instructed banks to stop processing exporters' collection documents.

After the announcement of the decision, the Federation of Egyptian Chambers of Commerce, the Federation of Industries and importers filed complaints, arguing that this move would lead to supply problems, increase production costs and local prices, and would have a serious impact on small and medium-sized enterprises that are difficult to obtain letters of credit. The government considered it carefully and withdrew its decision.

In October, Egypt's central bank said it would gradually lift the restriction by the end of the year.

Earlier this month, the International Monetary Fund (IMF) approved a $3 billion aid package for Egypt. Under the deal, the Middle Eastern country could receive $14 billion in additional financing.

Egypt has been grappling with rising inflation for months, with annualized inflation exceeding 18% in November.

Most Egyptians rely on government subsidies and other similar programs, many of which have been in place for decades, to meet their daily expenses. Nearly a third of Egypt's 104 million people are poor, according to government figures.

Here is a reminder, foreign traders who focus on the Egyptian market should pay attention to this new policy in time and get in touch with customers in time!

Quoted from Container Shipping Information