The Central Bank of Egypt (CBE) opened a commercial letter of credit of $400m for the Egyptian General Petroleum Corporation (EGPC). The amount will be directed towards paying for imports of petroleum products and liquefied natural gas (LNG) for the coming three months, a government official told Daily News Egypt.
Part of the amount will go to Saudi Aramco, who will supply Egypt with petroleum products for the coming three months –starting February 2016. The agreement includes payment facilities for Egypt and an interest rate of 1%.
According to the source, it is in Egypt’s best interest not to exceed the $400m amount, in order to avoid negatively affecting the country’s foreign currency reserves, adding that EGPC collects its dollar requirements through its own resources.
The CBE announced that the volume of foreign currency reserves increased to $16.445b by the end of 2015, compared to $16.422b in November last year, marking an increase of about $23m.