Egypt’s central bank said it has covered 50 percent of the foreign currency needs of investors seeking to repatriate funds outside the country.
The central bank will cover the remaining backlog in the “near future,” it said in a statement without specifying the dollar amount cleared.
Governor Hisham Ramez mobile phone was switched off when contacted by Bloomberg for comment.
Difficulties repatriating funds have reduced Egypt’s appeal as an investment destination, analysts say. Foreign currency inflows dwindled after the 2011 uprising against then-president Hosni Mubarak scared off investors and tourists. Net foreign reserves peaked at $36 billion before the uprising. In April they stood at $19.6 billion, after $6 billion in assistance was granted by Gulf Arab allies in March.
After the announcement, the EGX 30 Index trimmed losses by 0.1% to 8,668.20 at 12:26pm in Cairo, after earlier dropping as much as 0.8%.
The central bank said that the backlog formed because investors opted to “deal directly through the market” to send funds home instead of using the CBE’s repatriation mechanism set-up in March 2013. The bank said the mechanism was functioning “with utmost efficiency” to meet demand.
An update on the repatriation “was always going to be well-received,” Julian Bruce, the head of institutional trading at EFG-Hermes U.A.E. Ltd. in Dubai, said by e-mail. “Fifty percent is not the 100 percent everyone wants, but it’s a good start and sooner than expected.”
In April 2014, the central bank said it covered all repatriation backlogs.