Egypt has cleared a multibillion-dollar backlog of foreign currency requests from importers and foreign companies since floating the pound in November 2016, according to a central bank official.

This should improve the flow of letters of credit (L/Cs), which became very hard to come by since the 2011 uprising against former president Hosni Mubarak.

Foreign currency position

Clearing the backlog of foreign currency requests is seen as an indication that the Egyptian economy is recovering from a paralysing dollar shortage.

The banking system is reportedly also meeting new foreign-currency requests without delay.

L/C trends

A trend of increased Egyptian L/C flows this year was reported first by the country's largest bank, National Bank of Egypt, in January (DC World News, 20 January 2017) and underlined by Egypt's second biggest bank, state-owned Banque Misr in February (DC World News, 13 February 2017).

The Central Bank of Egypt (CBE) subsequently said that the country's banks were opening increasingly more L/Cs for petroleum products (DC World News, 21 April 2017).

Old L/Cs cleared

At the worst of the currency crunch, L/Cs had become so hard to secure that US$800 million of shipments were stuck in the country's ports. Those have now also been cleared.

The Bloomberg news agency says it has seen unpublished CBE data showing that US$1.5 billion in pending requests from multinationals to transfer funds to parent companies or pay suppliers have been cleared.

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