CAIRO (Reuters) – New rules requiring importers in Egypt to use documentary credits for payment came into force on Tuesday, but some basic food commodities and imports by foreign companies are excluded, the Federation of Egyptian Banks said in a statement.
And the central bank issued a decision last week obligating importers to use documentary credits instead of the collection document system, in a move that importers say will lead to increased inflation.
The statement said that imports of medicines, serums and related chemicals, tea, meat, poultry, fish, wheat, oil, powdered milk, infant formula, beans, lentils, butter and corn, are excluded from the Central Bank’s decision.
The statement added that shipments of less than five thousand dollars, express mail shipments, and imports of foreign companies and their subsidiaries are also excluded.
A group of traders and businessmen complained in a letter to the prime minister last week that the new rules could exacerbate supply chain problems, raise production costs and raise inflation.
Importers told Reuters that documentary credits would also force them to make larger upfront payments and lock up money that could be invested in their activities, while also raising input costs and prices for products sold in the local market.
A central bank spokesman could not immediately be reached for comment. The bank’s governor said last week that the new rules would not affect Egypt’s foreign trade.
According to the statement of the Federation of Egyptian Banks, banks were asked to facilitate the issuance of documentary credits, including reducing the issuance fees to be similar to the fees for collection documents.
Prime Minister Mostafa Madbouly said last week that the government was working on measures with the central bank to protect the local industry, improve the governance of the import system, and ensure the quality of imports.
CAIRO (Reuters) – New rules requiring importers in Egypt to use documentary credits for payment came into force on Tuesday, but some basic food commodities and imports by foreign companies are excluded, the Federation of Egyptian Banks said in a statement.
And the central bank issued a decision last week obligating importers to use documentary credits instead of the collection document system, in a move that importers say will lead to increased inflation.
The statement said that imports of medicines, serums and related chemicals, tea, meat, poultry, fish, wheat, oil, powdered milk, infant formula, beans, lentils, butter and corn, are excluded from the Central Bank’s decision.
The statement added that shipments of less than five thousand dollars, express mail shipments, and imports of foreign companies and their subsidiaries are also excluded.
A group of traders and businessmen complained in a letter to the prime minister last week that the new rules could exacerbate supply chain problems, raise production costs and raise inflation.
Importers told Reuters that documentary credits would also force them to make larger upfront payments and lock up money that could be invested in their activities, while also raising input costs and prices for products sold in the local market.
A central bank spokesman could not immediately be reached for comment. The bank’s governor said last week that the new rules would not affect Egypt’s foreign trade.
According to the statement of the Federation of Egyptian Banks, banks were asked to facilitate the issuance of documentary credits, including reducing the issuance fees to be similar to the fees for collection documents.
Prime Minister Mostafa Madbouly said last week that the government was working on measures with the central bank to protect the local industry, improve the governance of the import system, and ensure the quality of imports.
CAIRO (Reuters) – New rules requiring importers in Egypt to use documentary credits for payment came into force on Tuesday, but some basic food commodities and imports by foreign companies are excluded, the Federation of Egyptian Banks said in a statement.
And the central bank issued a decision last week obligating importers to use documentary credits instead of the collection document system, in a move that importers say will lead to increased inflation.
The statement said that imports of medicines, serums and related chemicals, tea, meat, poultry, fish, wheat, oil, powdered milk, infant formula, beans, lentils, butter and corn, are excluded from the Central Bank’s decision.
The statement added that shipments of less than five thousand dollars, express mail shipments, and imports of foreign companies and their subsidiaries are also excluded.
A group of traders and businessmen complained in a letter to the prime minister last week that the new rules could exacerbate supply chain problems, raise production costs and raise inflation.
Importers told Reuters that documentary credits would also force them to make larger upfront payments and lock up money that could be invested in their activities, while also raising input costs and prices for products sold in the local market.
A central bank spokesman could not immediately be reached for comment. The bank’s governor said last week that the new rules would not affect Egypt’s foreign trade.
According to the statement of the Federation of Egyptian Banks, banks were asked to facilitate the issuance of documentary credits, including reducing the issuance fees to be similar to the fees for collection documents.
Prime Minister Mostafa Madbouly said last week that the government was working on measures with the central bank to protect the local industry, improve the governance of the import system, and ensure the quality of imports.
CAIRO (Reuters) – New rules requiring importers in Egypt to use documentary credits for payment came into force on Tuesday, but some basic food commodities and imports by foreign companies are excluded, the Federation of Egyptian Banks said in a statement.
And the central bank issued a decision last week obligating importers to use documentary credits instead of the collection document system, in a move that importers say will lead to increased inflation.
The statement said that imports of medicines, serums and related chemicals, tea, meat, poultry, fish, wheat, oil, powdered milk, infant formula, beans, lentils, butter and corn, are excluded from the Central Bank’s decision.
The statement added that shipments of less than five thousand dollars, express mail shipments, and imports of foreign companies and their subsidiaries are also excluded.
A group of traders and businessmen complained in a letter to the prime minister last week that the new rules could exacerbate supply chain problems, raise production costs and raise inflation.
Importers told Reuters that documentary credits would also force them to make larger upfront payments and lock up money that could be invested in their activities, while also raising input costs and prices for products sold in the local market.
A central bank spokesman could not immediately be reached for comment. The bank’s governor said last week that the new rules would not affect Egypt’s foreign trade.
According to the statement of the Federation of Egyptian Banks, banks were asked to facilitate the issuance of documentary credits, including reducing the issuance fees to be similar to the fees for collection documents.
Prime Minister Mostafa Madbouly said last week that the government was working on measures with the central bank to protect the local industry, improve the governance of the import system, and ensure the quality of imports.