Egypt's banks are opening increasingly more letters of credit (L/Cs) for petroleum products according to a recent report published by the Central Bank of Egypt (CBE).

This appears to confirm the trend of increased Egyptian L/C flows this year, 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).

Increased flows

Banks operating in the Egyptian market opened L/Cs worth US$6.34 billion for imported petroleum products between January and December 2016, according to the CBE report.

It says the total collected in US dollars by the banking system since the Egyptian pound was floated on 3 November 2016 amounted to US$19.2 billion.

Positive indicators

The CBE added that it has achieved and exceeded the requirements in terms of foreign exchange reserves and monetary indicators stipulated as conditions of a US$12 billion International Monetary Fund loan that has helped replenish foreign exchange reserves and boost L/C flows.

Foreign exchange reserves at the CBE have now reached US$28.53 billion and are expected to increase in the future according to remarks made by the central bank's governor, Tarek Amer.

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