Wednesday’s announcement allows banks to push through transactions that were capped at $100,000 shortly after the 2011 uprising that ousted President Hosni Mubarak, creating conditions for a black market to thrive. The crunch eased after the central bank floated the pound in November and Egypt secured a $12 billion International Monetary Fund loan that helped attract foreign investors.

“The central bank wouldn’t have taken such a step unless it was backed by a solid recovery in the foreign-currency situation,” said Hany Farahat, an economist at Cairo-based CI Capital Holding. "It’s proof the currency crunch is dissipating."

Central bank Governor Tarek Amer said the removal of the restrictions will not affect foreign currency reserves, the state-run MENA news agency reported. Reserves rose 9 percent in May from the previous month to $31.1 billion, the highest level since February 2011.

The central bank had already allowed commercial lenders to repatriate dividends and eased restrictions on the use of debit and credit cards abroad. Since the float, the pound weakened by about half against the dollar, causing inflation to spike to the highest level in decades.

In a separate statement on Wednesday, the central bank said the current-account deficit for the period July to March fell 12.4 percent from a year earlier to $13.5 billion. Overall, the balance of payments saw a surplus of $11 billion, of which $9 billion came since the pound was floated.