(Bloomberg) --

Egypt cleared a backlog of foreign goods that had been stuck at its ports for months due to a shortage of US dollars, the prime minister said, signaling some of the pressure on the country’s currency may be easing.

“We emerged from the crisis of goods accumulated at the ports,” premier Mostafa Madbouly told reporters Saturday during a televised event. “We’re back to levels before last February — before the crisis began.”

The major wheat importer’s $400 billion economy, exposed to the shockwaves of Russia’s invasion of Ukraine, has been facing its worst foreign-exchange crunch in years and struggling to secure some key products. Authorities have devalued the pound three times since March and finally look like quelling a black market for dollars that appeared as Egyptians struggled to find the greenback through official channels.

The tackling of the import bottleneck suggests foreign-currency flows are beginning to stabilize. The central bank at the end of December removed a requirement that importers acquire letters of credit to bring in some goods, a step imposed earlier in 2022 to cool demand for dollars.

“All factories have returned to full operation, and have one to two months’ worth of raw materials and production supplies,” Madbouly said.

Egypt’s adoption of a flexible currency regime is a crucial plank of its new $3 billion loan deal with the International Monetary Fund. Gulf allies have also pledged more than $20 billion in deposits and investments to shore up the economy.

S&P Global Ratings on Jan. 26 affirmed Egypt’s B credit rating with a stable outlook, saying it expects its “large foreign-funding needs to be largely met by multilateral and bilateral financial support” in the fiscal year that ends in June.

--With assistance from Abdel Latif Wahba.

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