©Reuters
Investing.com – The central bank on Sunday turned to banks under its regulatory umbrella as violent market volatility in the country sent prices soaring to unprecedented levels.
This comes after some display platforms in the Egyptian market were forced to shut down repeatedly last week due to rapidly rising prices.
In the letter, the Central Bank of Egypt said that, following developments in the markets, “kindly observe the following regarding gold, given the nature of its trading movement…
- – In the event that the collection of the gold export transactions is not received within a maximum period of 7 working days from the date of shipment, and after the bank has followed up with the customer only for the following 3 working days, it must inform the Central Bank of the name of the customer and his group in the concept of single customer and of the parties related to him released by the Central Bank to include them in the lists of Defaulting customers, as no similar operations have been carried out by the customer and the group in the future .
- – The bank must inform various other subjects, including: the Ministry of Commerce and Industry, the Customs Agency and the Bolli e Bilance Authority, so that they can adopt the necessary measures.
What does resolution mean?
The new decision means depriving the infringing source of gold from exporting again.
Former secretary of the Gold Division of the Cairo Chamber of Commerce, Nadi Naguib, said the main objective of the Central Bank’s decision is…
- Provide dollar proceeds for importing important commodities, such as food products and manufacturing raw materials.
- Savings in easing the pressure on its prices, which have been recording continuous increases for several months.
The price of the dollar currently fluctuates in the official market (in banks) around 24.5 Egyptian pounds, while gold dealers in the local market trade at a price that revolves around 33 Egyptian pounds per dollar.
It is the main reason for the yellow metal’s rise to record highs in recent weeks, according to gold market sources.
export taxes
And Egypt’s Minister of Supply (TADAWUL:) and Domestic Trade Dr. Ali Al-Moselhi issued a decision – two weeks ago – that canceled all export taxes for gold jewelry during the next period, to encourage the export of gold, and to supply more dollars.
This step was widely accepted by gold traders and exporters, and some of them suggested purchasing quantities of raw gold in exchange for exporting manufactured gold, to ensure local balances were cleared.
Egypt produces limited quantities of gold, mainly from the Sukari mine in the Eastern Desert, operated by Centamin International, and the company exports most of the gold it extracts.
Egypt’s exports of gold, jewelry and precious stones totaled about $1.12 billion in the first 9 months of 2022, up from $839 million in the same period of 2021, an increase of 34%, according to data from the Export Council for Building Materials, Refractories, Metallurgical Industries, and Construction.
