New CXC report on Corporate Treasury in Egypt.

The latest CompleXCountries report on Egypt,based on a detailed peer discussion is now available at: https://www.complexcountries.com/corporate-treasury-fx-bank-relationship...

As the second most populous country in Africa, Egypt is a key market for most MNCs. It presents a series of unique challenges: an Arab country which has the Suez Canal and borders with Israel, Gaza, Sudan and Libya cannot escape turmoil. It is a deeply Islamic country, but with a secular constitution and a relatively open economy, which depends heavily on tourism. The security this requires can be at odds with the many tensions in the region.

Over the past few years, the economic situation has been very difficult, especially with the impact of COVID on tourism and global shipping. Access to hard currency was severely limited, and many MNCs built up backlogs of overdue import invoices. There were no formal exchange controls, but many regulations effectively limited access to funds.

In 2024, the government devalued the currency, raised interest rates, and introduced a series of austerity measures. At the same time, Saudi Arabia and, more recently, Qatar, have announced significant investments in the country. The result has been a stabilisation of the exchange rate, a reduction in inflation - even if it remains high at over 20% - and a considerable easing in the availability of foreign currency. The overall mood is one of cautious optimism: the situation is still difficult, but improving.

Given the environment in which the country operates, this is impressive.

The full report covers Treasurer's experiences with and approaches to:

• Foreign exchange regulations and practices
• Use and management of Letters of Credit (LCs)
• FX availability 
• Methods of managing foreign currency flows
• Payment terms in the market
• Funding structures and intercompany financing
• Cash management and liquidity
• Exchange-rate exposure and losses
• Corporate legal structures in Egypt
• Local vs. imported manufacturing setups
• Bank relationships and banking landscape
• Geopolitical context and external investments
• Overall business environment and operating conditions

Service providers discussed  in the full report: HSBC, Citi, Standard Chartered