The Central Bank of Egypt (CBE) decided on November 28 to terminate the foreign exchange repatriation mechanism, starting from December 4, for new portfolio investments, Invest-Gate reports.

The decision is for “any fresh foreign currency portfolio investments wishing to enter the local currency Egyptian T-Bills, T-Bonds market and the stocks listed on the Egyptian Stock Exchange,” CBE said in a statement that pointed to notably enhanced macroeconomic indicators, including a revived foreign reserves position.

The mechanism was first set in March 2013 to assure foreign investors that they would have access to foreign currency when they wish to withdraw from the Egyptian securities.

However, CBE said the decision will not “apply to balances held inside the mechanism before the aforementioned date. Investors that initially entered through the repatriation mechanism before December 4, the close of business day, may exit through the repatriation mechanism at any time.”

“Fresh foreign currency portfolio investments, from this point forward, should be channeled through the interbank market,” the bank noted.

Egypt floated the pound in November 2016 and implemented tough austerity measures as part of a USD 12 bn loan deal with the IMF.

“Two years from that date, this regime has led to the successful elimination of all foreign exchange shortages that previously disrupted economic activity, thereby significantly improving Egypt’s external balances,” CBE said.

The central bank said Egypt’s foreign currency capital inflows since November 3, 2016 had hit a total of USD 111 bn and that the current account deficit had dwindled from 5.9% of gross domestic product in FY 2015/16 to 2.4% in the following year.