It was only in February of this year that the Egyptian central bank introduced the obligation to have a letter of credit for imports. However, it should disappear again by the end of 2022.

The letter of credit is used in foreign trade and, by securing the banks involved, provides security for both the importer and the exporter. However, the payment instrument also entails higher import costs.

Egypt had exempted local multinational companies and shipments valued at up to $5,000 from the rule. Certain product groups, such as medicines or wheat, were also excluded from the obligation to provide a letter of credit.

By the end of the year, the obligation to have a letter of credit is to be phased out for all goods. As of October 27, the value limit has been increased from $5,000 to $500,000 for shipments exempt from a letter of credit.

Source: GTAI (German)