Feb 05 2013

Egypt c.bank allows overseas Egyptians to repatriate investments

By Mohamed El Agamy Egypt c.bank allows overseas Egyptians to repatriate investments
Egyptian citizens living overseas who remit money to Egypt will now have the right to repatriate it, starting February 10, 2013.

The Central Bank of Egypt communicated this decision in a letter to banks dated February 4, 2013, a copy of which has been obtained by Zawya.

The letter signed by CBE governor Hisham Ramez, who was appointed last month, says: "Starting February 10, the Central Bank of Egypt will allow individual Egyptians who remit money to an Egyptian bank to have the right to repatriate the same value outside Egypt, to the same person who made the transfer. This will be allowed after the individual liquidates, wholly or in part, an investment made in Egypt using the original remittance. The person who seeks to repatriate the money will have to provide documents that the amount being sought to be repatriated was part of or equal to a remittance."

A senior central bank official told Zawya on condition of anonymity, because he is not authorized to speak to media, that the decision to allow repatriation aims to encourage Egyptians abroad to increase remittances and invest them in Egyptian assets, as it raises confidence levels in the Egyptian economy. "It will also help eliminate the black market for US dollars," he said.

CBE has raised the interest rate payable on savings in local currency to 12.5%, which is another measure intended to increase remittance flows. Remittances to Egypt reached USD 19 billion in 2012, compared with USD 14.3 billion in 2011, according to central bank data.

"Egyptians abroad are cautious about investing in Egypt due to the political situation. This decision will encourage them to invest their money at home in the medium term, as well as increase the legitimate inflows of US dollars into the Egyptian banking system," Dr. Izzat Abdullah, a professor of economics at Thebes Academy, told Zawya.

Egyptians abroad prefer to invest in real estate, gold and bank deposits, which are considered low-risk investments. "The decision will also have a positive impact on the real estate market in Egypt, which has seen tough times over the past two years," Dr. Abdullah said.

"It is a message of reassurance to Egyptians abroad," added El-Sayed Mohamed El-Kosayer, chairman and managing director of the Industrial Development and Workers Bank of Egypt. "Allowing repatriation removes fear of investing in home markets."

© Zawya 2013

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