On September 2nd, the Ministry of Finance announced an important piece of news. Egypt removed the customs exchange rate. Naturally, this is a big deal and everything.
However, for people who are extremely bad with finances, well, we don’t really understand it. So, we’ve decided to get to the bottom of things and find out how this is going to affect our day-to-day life.
Dissecting What Happened
To understand everything that’s going on we’ll first have to understand what the customs dollar is. In all honesty, it’s actually quite simple.
The customs dollar is what someone who imports overseas goods pays in local pricing so the goods can exit Egyptian Customs.
It also usually has a higher rate than the normal dollar rate is. Yes, this is why you always pay extra when you buy stuff online.
Egypt began setting a monthly price for the custom dollar since January 2017 as part of the economic reform program. Last July, this price had been around EGP 16 for $1 for essential imported commodities. The non-essential items’ exchange rate was around EGP 16.68.
On a second thought, we might not need to know what the customs dollar is anymore because the Ministry of Finance announced that they were cancelling it for all imported items.
Now, the prices of any overseas item will be set according to the regular dollar price set by the Central Bank of Egypt.
What This Is Going to Affect
The Customs process isn’t going to change at all for the essential overseas items, but the other non-essential items’ prices will be affected by 5 to 10%, according to what kind of item it is.
The Ministry of Finance also prohibited raising the prices of any essential commodity to keep the market stable and to protect the middle and working class buyers.
To sum it up, the removal of the customs dollar means that whenever you buy something from abroad, you’ll pay its original price and the delivery fee. No more, no less.
So, items like pet food, make-up, cigarettes, and electronics might get cheaper.
What This Isn’t Going to Affect
Some markets aren’t going to be affected with the dollar’s liberalization, however.
Cars, for example, are going to have the exact same prices as before. It’s no special decision or anything; it’s because the imported car market never dealt with the customs dollar in the first place.
