Egypt moves to help foreign investors repatriate funds
Investors in stock and government debt markets will get access to dollars despite shortages of foreign currency
Egypt's central bank opened a scheme today allowing foreign investors in the stock and government debt markets access to dollars despite severe shortages of foreign currency.
In a statement posted on its website, the central bank said it had decided to restart and broaden a mechanism helping foreign investors to repatriate their funds that was used in 2000-2003 - also a period of dollar shortages when the Egyptian pound's value fell sharply.
"In addressing the central bank's responsibility for moving the Egyptian economy securely through the exceptional circumstances that the country is going through, it has decided to reenact those mechanisms starting [today]," the bank said.
Egypt has endured two years of political instability, driving tourists and foreign investors away and draining its foreign reserves. These fell to a critical level of $13.5 billion at the end of February from $36 billion just before the uprising that ousted president Hosni Mubarak in 2011.
The Egyptian pound has lost more than 8 per cent against the dollar since the end of last year and central bank has rationed dollars through auctions to commercial banks to slow the slide in the pound and the reserves.
The "Foreign Investors' Repatriation Mechanism" will be expanded to cover treasury bills and bonds in addition to investments on the Egyptian stock market, the statement said.
Egypt wants to negotiate a $4.8 billion loan from the International Monetary Fund and has rejected the possibility of short-term IMF financing during its current political uncertainty. The IMF's director for the Middle East and North Africa Masood Ahmed is due in Cairo for talks with the government today.
Parliamentary elections were supposed to start on April 22nd but a court cancelled president Mohamed Mursi's decree calling them. An appeal against the ruling is being heard today.