Termination of CBE’s Foreign Exchan

The Central Bank of Egypt (“CBE”) announced the termination of the foreign exchange repatriation mechanism as of close of business day of 4 December 2018,[1] more than two years after it was put in place on 3 November 2016. In conjunction with its liberalization of the exchange rates at the end of 2016, CBE established this mechanism with the aim of enabling foreign investors in Egyptian securities to obtain foreign currency in case of repatriating investment assets or returns at any time. However, as the exchange rates stabilized, the balance of payments improved, and the foreign currency reserves increased, CBE decided to terminate said mechanism such that the normal procedure for investors in currency markets dealing through the banking system is operating once more. Thus, although CBE’s decision was widely reported by media outlets in a manner that made it seem as if it terminates the provision of foreign currency to foreigners and thus negatively affects them, it is actually a return to the normal state for the exchange market. The mechanism was an exceptional measure for foreign exchange repatriation that addressed a temporary crisis that has since passed, the decision is hence a positive one.   [1] Central Bank of Egypt, “Termination of the Foreign Exchange Repatriation Mechanism by the Central Bank of Egypt as of Close of Business Day of 4 December 2018”, available through this link (in Arabic).