Central Bank of Egypt ends Letter of Credit system for importing

In late October, the CBE announced that it would begin a process of phasing out letters of credit system for import finance by the end of December.

Last February, the CBE instituted the LCs system obliging all importers to use letters of credit to finance their imports instead of the collection system of cash-against-documents that had been in force for many years.

The February decision exempted foreign companies and subsidiaries from the rules.

However, the LCs system was met with objections from importers who said it would worsen existing supply chain problems, increase production costs and lead to higher inflation.