The Central Bank of Egypt (CBE) has reduced commissions on opening letters of credit (L/Cs) from 2.5 per cent to 1.5 per cent.

Egyptian importers have welcomed the decision, but say that improving the availability of US dollars is more important.

Stranded shipments

Importers have struggled with US dollar shortages, which have led to shipments being held up in Egyptian ports, which are in turn struggling with a surfeit of containers.

Media reports suggest that the value of stranded shipments may be as much as US$1 billion, with many importers facing increased storage costs for as long as their goods remain in Egypt's ports.

L/C difficulties

The biggest difficulty faced by importers is opening L/Cs according to representative for the General Division of Importers at the Federation of Egyptian Chambers of Commerce, Hamdy El-Naggar.

He says imports are at a complete standstill because of the L/C shortage and called on banks to address the challenge of providing US dollars for L/C transactions.

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