Egyptian banks suspend debit card use in foreign currency abroad

Doaa A.Moneim , Monday 9 Oct 2023

Several local banks suspended on Monday hard currency cash withdrawals and purchases made outside Egypt using debit cards, as per instructions from the Central Bank of Egypt (CBE) to reduce pressure on foreign currency reserves, an informed source told Ahram Online.



Banks such as the National Bank of Egypt (NBE), Banque Misr (BM), Commercial International Bank (CIB), and Emirates National Bank of Dubai (ENBD) have sent text messages to their clients notifying them of the new measures.

On Sunday, the Arab African International Bank (AAIB) suspended using debit cards outside Egypt and set new limits on withdrawals and purchases by credit cards abroad.

An official source at one of the national banks in Egypt told Ahram Online that the Central Bank of Egypt (CBE) has instructed all banks operating in the local market to suspend hard currency withdrawals made abroad using debit cards.

The CBE has neither issued a circular implying this direction nor published a statement.

The source explained to Ahram Online that the action aims to contain the misuse of debit cards abroad, as some holders tend to withdraw cash in hard currencies, especially in US dollars, and then sell it in the parallel market to benefit from the significant difference between the official rate and that on the black market.

The US dollar is valued at 30.95 Egyptian pounds according to the official exchange rate of the CBE. It is, however, traded at over 40 Egyptian pounds in the black market.

Last week, HSBC Egypt announced that starting 1 October, the bank lowered the limit on monthly cash withdrawals made abroad from $ 1,500 to $ 1,000 or their equivalent in other currencies.

Egypt has adopted a plan to secure $191 billion through 2026 to address the US dollar shortage in the local market.

In addition, some international institutions, including HSBC and Fitch Solutions, expected in reports issued this week the EGP to lose up to 25 percent of its value against the greenback before the end of 2023.

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