CAIRO: The Central Bank of Egypt (CBE) announced Tuesday it has covered 50 Percent of foreign investors’ pending backlog, through direct sales to investors’ custodians, amid efforts to ensure the domestic market’s efficiency and strength.
In a statement post on its website, the CBE attributed the accumulated funds due to foreign investors’ tendency to deal directly through the market and not through the CBE repatriation mechanism.
“The CBE repatriation mechanism that was reinstated on March 17, 2013, is functioning with zero tolerance to delays and with utmost efficiency,” the statement read.
Egypt’s central bank pledged to “cover the remaining backlog in the near future.”
“The step boosts foreigners’ confidence in the Egyptian market,” Youm7 quoted chairman of the Egyptian Exchange (EGX,) Mohamed Omran, during an investor conference held Tuesday.
Omran added that the move would also lure fresh investments in the EGX as well as bolstering new cash liquidity in the coming period.
“Foreign investors focus on two key elements while eyeing investment in a certain market; the possibility to exit whenever they are want, and getting the needed finance for expansion either from the stock market or from banks,” Omran told The Cairo Post in February.
In the wake of the January 25 Revolution, many foreign investors sold their stocks and assets in light of political and economic instability in that period, but they faced troubles in repatriating their funds.
Egypt’s government was not able to provide millions of dollars owed to foreign investors, with a sharp slip in foreign currency resources as foreign direct investment and tourism revenues were battered dramatically.
Net international reserves amounted to $19.559 billion at May-end, compared to some $36 billion before the January 25 Revolution in 2011.
Additional reporting by Mahmoud Askar.