CBE Abolishes Transfer of Foreign Investors' Funds Abroad

By: Taarek Refaat

CAIRO, Dec. 8 (SEE)- The Central Bank of Egypt (CBE) abolished on Wednesday a mechanism to transfer foreign investors' funds abroad.

The CBE said in a statement that new investment earnings can only be transferred through the global interbank market. "The decision will not be applied to the existing balances within the mechanism before December 4," CBE added.

Portfolio investments in government debt including treasury bills (T-Bill) and bonds, as well as assets listed on the Egyptian stock market will be subject to the new mechanism.

In 2013, as the country's economy was tumbling, a mechanism was issued to encourage investors to enter the local market with the guarantee of a free exit. In November 2017, the central bank imposed 1 percent fees on new investments that enter through the mechanism.

Governor of the CBE Tariq Amer said that the abolition of this mechanism was planned since the liberalization of the local currency in November 2016, explaining that after foreign reserves reached a record high, the mechanism has been canceled to direct investment funds instantly to the market.

With the positive outcomes achieved through the economic reform program, confidence increased raising the volume of foreign exchange transactions between banks within the new mechanism.