The ICC Banking Commission conducted its final meeting of 2024 virtually via Teams on 20-21 November. Four separate portions of the event open to Banking Commission members and ICC National Committee representatives took place.
At year-end 2022, the Central Bank of Egypt (CBE) announced cancellation of its mandate requiring use of letters of credit for imports and restored the ability of traders to use documentary collections for imported goods.
The CBE’s 13 February 2022 decision implemented in March 2022 had required Egyptian banks to accept only LCs for imports in an attempt to reduce US dollar outflows from Egypt (Mar 2022 DCW 9). Thereafter, Egyptian banks had struggled to process the vast number of LC applications from Egyptian importers and lengthy waitlists forced importers to pay large sums due to port delays and/or cancel further shipments.
In May 2022, Egypt’s President Abdel Fattah El-Sisi ordered the reversal of the CBE’s LC policy requirement, known as Instruction Number 49, and called for broader exclusions from the system. By 27 October 2022, the Regulations Department of CBE’s Banking Supervision sector had issued circulars regarding increasing the exception limit of shipments from LCs and an updated summary of inquiries and responses about LCs.
Overall, observers have suggested that administrative indecision and the back and forth regarding the requirements for importers to secure LCs has complicated the establishment of stable trading conditions for importers and exporters.
