ANNOUNCED AS TEMPORARYNo
Controls on commercial transactions and investment instruments
The government of Egypt for the first time on 31 July 2017, introduced a measure aimed towards liberalising a specific type of transaction embedded in the operations of its national stock market.
Specifically, the government of Egypt for the first time lifted the local currency restrictions imposed on returns deriving from Egyptian investors purchasing Global Depository Receipts (GDRs) via procuring shares listed on the national stock exchange. In other words, Egyptian investors now for the first time will be able to receive their GDR returns in the US dollar currency -- as previously they were only allowed to receive their returns in Egyptian Pounds.
Global Depository Receipts (GDRs)
Global Depository Receipts are bank certificates that are issued in multiple countries for shares in foreign companies which are usually held by a foreign branch in an international financial institution. In the context of the GDRs, it is relevant denoting that the shares serving as their underlying instrument, are traded as domestic shares, yet are offered for sale globally. Lastly, it is important denoting that GDRs are often used for the purpose of raising capital in US Dollars or Euros -- a purpose which previously in Egypt was characterized as more challenging due to the imposed local currency restrictions.
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