The Central Bank of Egypt (CBE) has abolished the requirement for a letter of credit to import goods, the February 2022 decree that had required importers use letters of credit was lifted, and the previous documentary collections (cash against documents) system for imported goods restored.

The letter of credit system was introduced as part of efforts to control dollar outflows amid a mounting foreign currency reserve crisis. However, there had been mounting criticism that it resulted in cargo piling up at ports, further inflationary pressure, and shortages of imported goods.

Under the system, payment transactions needed to take place between two banks in advance of import clearance, causing delays in the import process.

With the cancellation of the letter of credit requirement, importers are now allowed to go back to using collection documents for transactions, enabling direct transactions between importers and exporters.

Contact us for advice about trading with Egypt, or for help with Letters of Credit cash against documents and other international payment methods.

Or, telephone 01254 945903.

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