Cash Repatriation

FX & Treasury in Egypt

Report date: 
1 Nov 2022

Commentary

Egypt is a challenging environment – but one which seems to work overall. The country went through a bad period in 2015/2017, when foreign currency was auctioned, and in very scarce supply. The situation then improved, but has recently deteriorated again. This is hardly surprising, given the role tourism plays in the economy, and the combined impacts of COVID and the Ukraine war.

The situation reported by all participants is that there are no formal exchange controls, but banks are rationing hard currency according to a priority system, under which essential goods, such as food and pharmaceutical goods, get paid first, and items such as services, royalties and intercompany debt are satisfied last – if there is any currency left. The way in which this is implemented varies from bank to bank, so it is vitally important to maintain good relationships with your banks. The common themes were:

  • Most participants sell hardware offshore in hard currency, and provide services onshore billed in Egyptian pounds. This has worked well, but the distributors are finding it increasingly difficult to get access to the hard currency.
  • Some are requiring LCs, on the grounds these improve the chances of getting hard currency when payment is due. However, banks are reluctant to issue them, and they can be very expensive.
  • Egypt is in advanced negotiations with the IMF over an aid package, which should ease the payment issues. This is expected to be accompanied by a devaluation: this is further complicating the FX
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Topics covered in this report: 
FX, Hedging FX, Letters of Credit (LC), Funding, Cash Repatriation
Service providers discussed in this report: 
Citi, HSBC

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Treasury & FX in Brazil

Report date: 
30 Jan 2019
  • Receivables are moving from paper to electronic, but Boletos continue to be challenging to achieve automated straight through reconciliation.
  • Capital Injections & Hedging, continues to be challenging and requires extensive planning and work to make sure there are no delays.
  • Cash Repatriation & Hedging, seems to be easier as long as documentation is correctly in place.
  • Cautious optimism for the economy in the year ahead. 
Topics covered in this report: 
Receivables, Boletos, Funding, Hedging FX, Cash Repatriation
Service providers discussed in this report: 
BAML

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Treasury & FX in Egypt

Report date: 
12 Feb 2019
  • Egypt is a prime example of how you need a different mindset in complex countries. Two years ago, we would have just heard tales of woe and people struggling to keep basic operations running. Now, it is beginning to work again. But for how long? These countries have cycles: it is important not to despair during the difficult periods, and not to get carried away during the good ones.

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Topics covered in this report: 
FX, Hedging FX, T-bills, Invoicing, Cash Repatriation, Banking
Service providers discussed in this report: 
SWIFT, Citi

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