Banks in Egypt are adopting strict measures before issuing letters of credit (L/Cs) for foreign transactions.

They are doing so to guard against any failures on the part of the Central Bank of Egypt (CBE) to provide sufficient foreign exchange.

New auction system

The CBE has introduced a new system for banks under which they will only be able to obtain US dollars during the CBE's foreign exchange auctions.

These will be held three times a week, on Sundays, Tuesdays and Thursdays.

Banks unconvinced

But bankers are reportedly not convinced that the CBE will be able to meet all demands for foreign exchange.

According to one senior banker, this is forcing banks to reconsider importers' requests to issue L/Cs for new foreign-trade operations.

The CBE however is receiving support from Africa Export-Import Bank to make L/Cs and foreign exchange more available (DC World News, 14 December 2015).

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.