The Central Bank of Egypt (CBE) has revised the mechanism by which it provides US dollars to banks in the Egyptian market.
The CBE previously used a quota system by which it would sell an established volume of US dollars at weekly auctions.
Under the revised system, banks will submit requests to the CBE detailing investors’ expected demand for US dollars, a source told Daily News Egypt.
The CBE will then compile the reports for review before allocating currency to each bank. Banks are obliged to use the currency deployments to fund products that the CBE has approved for import.
In the second week of the system’s application, the CBE allocated $120m to finance food commodity imports on Tuesday.
The CBE currently sells US dollars to banks at a price of EGP 8.78 per US dollar. Banks are obliged to offer customers an exchange rate of EGP 8.88.
Tuesday’s auction is the third to allocate US dollars for food commodity imports.