Egypt's Central Bank signs $500mn trade facility agreement with Afreximbank

The Central Bank of Egypt (CBE) signed a $500 million trade finance facility agreement with the African Export-Import Bank (Afreximbank) to allow Egyptian importers to buy strategic and key industrial products.

The Cairo-based Afreximbank stated on Thursday on its website that it would move on the implementation of the agreement to ensure quick delivery of its benefits to the most populous Arab nation, which is currently facing a crunch US dollar shortage.

Egypt has been facing a dollar crisis since losing about half of its $36 billion international reserves in the wake of 2011 uprising that toppled president Hosni Mubarak, which was followed by a security vacuum that has scared away tourists and investors.

The new agreement is part of a $3.5 billion financing programme approved by Afreximbank in December “aimed at enabling the bank’s member-countries to adjust to current adverse economic shocks, especially commodity price and terrorism-induced ones,” the bank said.

In November, Afreximbank offered the CBE to arrange a facility of up to $1 billion to improve foreign currency liquidity through either trade finance lines of credit to key state-owned commercial banks or funding the CBE with US dollars in exchange for an equivalent amount of Egyptian pounds.