An increase in Egypt's exports may signal a move towards improved letter of credit (L/C) availability.

The country's exports increased by 7 per cent in May compared with the same month last year according to the Egyptian trade minister.

Improvement

Exports reached US$1.9 billion in May compared with US$1.7 billion in the same month last year, according to a statement issued by trade and industry minister, Tarek Kabil.

The statement also said exports have now reached US$8.4 billion this year, whereas in the same period last year the value of exports dropped by 16.4 per cent.

Forex shortage

The increase in exports should help Egypt replenish its depleted foreign exchange reserves, which have been too low to guarantee a free flow of L/Cs for importers.

This prompted the Egyptian government in late 2015 to require importers to lodge a 100 per cent cash margin on import L/Cs, register the original manufacturers of imported products and obtain import documents directly from foreign banks.

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