Egypt sets customs dollars at 16.5 EGP in May

CAIRO – 30 April 2017: Egypt has fixed the customs dollars at 16.5 EGP to the dollar starting from tomorrow, the beginning of May, Minister of Finance Amr el-Garhy said on Sunday.

The new rate is 10 percent lower than the marker rate of the dollar. The exchange rate of the dollar stood at 18.01 EGP in Sunday’s transactions.
The instability of custom dollars following the flotation of the Egyptian pound late last year has prompted importers to ask the government to set the custom dollar at a fixed rate to avoid market and price instability.

Following the pound’s rally in February, the government fixed the custom dollar exchange rate at LE16, down from LE18.5, and it reviewed the rate every two weeks instead of monthly since then.

Following the float, the value of the custom dollar had increased 80 to 100 per cent, and therefore the imports’ bill increased by the same amount.
Egypt's annual headline inflation rose to 32.5 percent in March, up 0.8 percent from February.

Fixing the customs dollars at a lower rate will do little concerning the rising prices of commodities as the value of the custom dollar constitutes only 11 per cent of total customs costs. Consequently, the move can only lower prices on goods such as cars, refrigerators, washing machines and other appliances, on which high customs are imposed.

But for foodstuffs and other essential goods, the effect of the move will go unnoticed as custom duties on these goods are low.