Egypt’s Ministry of Civil Aviation said it has reached an agreement with the central bank over payments to foreign airlines that have raised concerns in recent weeks over the withdrawal of earnings.

A statement from the ministry on 3 March said: “The airlines will be paid what they are owed in foreign currency through a payment programme over the coming period.”

Germany’s Lufthansa and the UK’s British Airways were two airlines that publicly complained over restrictions imposed by the central bank.

Egypt is facing a shortage of foreign currency and as a result the central bank imposed limits in early 2015, which has hindered the ability of foreign companies to repatriate earnings.

Sources close to the central bank have told MEED that several major airlines have been informed of the bank’s efforts to ease the withdrawal of foreign currency.

The central bank has taken a protectionist approach towards to the foreign currency crisis, with hard cash being reserved for food and fuel products instead of what it calls non-essential goods and services.

The lender’s policies have meant many industrial operations have struggled as imports become problematic. Foreign investors in other sectors have also found it difficult to do business in Egypt amid the restrictions.

In February, US-based General Motors’ (GM) division in Egypt halted its operations in Cairo due to ongoing currency concerns. At the time, a company source was quoted in local newspapers as saying the ongoing currency situation has meant GM has been unable to free up imports being held up in customs.

GM has since resumed its operations in the country.

Earlier this month, the central bank increased the amount of US dollars local companies can deposit with banks to $250,000 a month, from the previous cap of $50,000. Although the central bank’s actions aim to increase the availability of dollars to local lenders, it will not be sufficient to ease the increasing liquidity pressures of foreign currencies that Egyptian banks face.

“New dollar deposit limits [are] still below the demanded amounts necessary to finance imports,” said US ratings agency Moody’s Investors Service in a sector comment published on 1 February.