CAIRO: The Egyptian Exchange listed GB Auto had to halt its passenger car (PC) operations for 20 days during September due to the foreign currency crisis, the company chairman Raouf Ghabbour said at a Wednesday conference.
A recent report from Automotive Marketing Information Council (AMIC) showed that Egypt’s passenger cars sales slipped 20 percent year-on-year (y-o-y) to around 16,400 cars in September.
Experts attribute the decline to a sharp slip in hard currency resources, with Egypt’s net international reserves dropping for three consecutive months to hit $16.3 billion at September-end.
“GB Auto has been more or less able to endure the delayed availability of foreign currency following the cash-deposit cap imposed in February. This may have been attributed to the company’s utilization of foreign‐currency, bridge‐like overdraft facility, as suggested by the significant increase in its second quarter credit facilities,” HC Securities and Investment, a leading financial institution in the Middle East and North Africa, commented in an email to The Cairo Post.
In early September, the Central Bank of Egypt banned the use of FX auction proceeds to cover foreign-currency, bridge-like overdraft facilities that some companies, including GB Auto, were using to overcome the lengthy waiting time to source foreign currency, HC research center added.
HC noted that Hyundai sales fell to 3,445 cars from 3,852 in August and 4,602 in July, according to the AMIC report.