The Central Bank of Egypt (CBE) removed caps on deposits and withdrawals of foreign currency for importers on Tuesday, lifting one of the last currency controls in the system. CBE lifted controls limiting deposits of hard currency by importers of non-essential goods (USD10,000 a day and USD50,000 a month) as well as a withdrawal limit of USD30,000 a month.

Our comment: The move is definitely a positive one and sends further positive signals of the easing pressure in the FX market following the devaluation a year ago. It comes after a few months of CBE scrapping outward transfer limits for individuals. Moreover, we do not see major pressures building up on the EGP as a result of the decision, given that importers of these goods were already having good access to foreign currency through the banking system. This is supported by the Jun-Oct appreciation of the USD-EGP and near non-existence of the parallel market.

(Reuters, Mohamed Abu Basha)