Afreximbank proposes $1bn facility for Egypt’s foreign currency liquidity

The President of the African Export-Import Bank (Afreximbank), Dr. Benedict Oramah, says that the bank will arrange a facility of upto$1 billion for the Central Bank of Egypt (CBE), underwriting $500 of the amount, to complement the efforts of the central bank to improve foreign currency liquidity.

A statement by Afreximbank said that Oramah stated at the presentation of the proposal during a courtesy call on Tarek Amer, Governor of the CBE, in Cairo that the Countercyclical Medium Term Trade Liquidity Facility would support imports of essential goods towards the sustenance of industrial activity in the country.

“The facility could operate either as an allocation of trade finance lines of credit to key state-owned commercial banks, on the basis of a list of import letters of credit, with Afreximbank honouring due payments under such import letters of credit through drawings under the allocated line to be repaid by the Egyptian banks or it could be in form of a foreign exchange swap arrangement with the CBE under which Afreximbank would fund the CBE with U.S. dollars in exchange for an equivalent amount of Egyptian pounds,” he said.

Explaining that the facility was part of Afreximbank’s effort to support African central banks to improve foreign currency liquidity, Oramah said that once the proposal received the favourable consideration of the CBE, Afreximbank would start mapping out the operational modalities with the relevant parties.