Regulatory Alerts2022-12-18 | CBE3.10Added · Updated
CBE Regulation Book 3.10: Prohibition of Speculation in Precious Metals and Foreign Exchange Spot Transactions and on the Egyptian Pound Using Financial Derivatives
The Central Bank of Egypt prohibits banks from trading or speculating in precious metals and restricts foreign exchange spot transactions to those necessary for the bank's operations, banning margin trading for precious metals and foreign exchange. Banks are permitted to conduct forward FX, FX swaps, and non-deliverable forward transactions for corporate clients and with other local banks, provided these are strictly for hedging commercial exposures and not for speculation. The regulation also bans Egyptian banks from opening Egyptian Pound accounts abroad for speculative purposes and prohibits Egyptian banks from executing financial derivatives linked to the Egyptian Pound with Egyptian residents, except for hedging regulatory reserve requirements. Non-compliance subjects banks to measures determined by the CBE Board of Directors.