The Central Bank of Egypt (CBE) said on Wednesday that it has removed limits on international currency transfers, a long-awaited step that could spur foreign investment to Egypt.
The move to ease capital controls is in line with a timeframe set out under an International Monetary Fund (IMF) programme agreed to late last year.
It requires Egypt to scrap the $100,000 cap on individuals’ transfers abroad and a $50,000 monthly deposit cap on non-priority imports by June.
“It was decided to permit banks to execute their clients’ orders to make transfers abroad without maximum limits,” the bank said in a statement.
Controls were imposed after the January 25 Revolution against former president Hosni Mubarak to crush a black market for dollars and curb foreign currency outflows, as well as limit the amount of hard currency an individual can transfer abroad to $100,000 per year.
“The limits remove is expected to spur foreign investment to Egypt,” the CBE governor said in the statement.
Egypt has struggled to revive its economy in the wake of the January 25 Revolution, which drove away tourists and foreign investors, both major sources of hard currency.
A dollar shortage crippled imports and ballooned public debt, in part because of huge subsidy costs and poor tax collection.
In a dramatic move in November, the CBE floated the currency and agreed on a $12 billion loan with the IMF to support its reform programme.
“The ($100,000) is one of the very few capital controls left. This confirms Egypt’s commitment to honouring its obligations under the IMF staff agreement,” said Reham El-Desouky, economist at Arqaam Capital.
“This is also proof of the increased availability of foreign currency in the banking system.”
Amer previously said that Egypt has received $8 billion in investment from 150 global investment funds over the past six months and that it will make a debt payment of $750 million to international oil companies on 1 June.