Egyptian Pound

The Central Bank of Egypt directed banks operating in the country to stop using “direct debit cards” for customers abroad, and to limit their use inside Egypt only, without specifying the time period for implementing this directive, according to 4 heads of banks operating in Egypt who spoke to Al-Sharq.

The verbal instructions to banks operating in Egypt come at a time when the country is suffering from a clear scarcity of hard currency, despite Egypt devaluing the pound three times since the beginning of 2022 and losing nearly half of its value against the dollar.

One of the heads of private banks who spoke to Al-Sharq attributed the central bank’s decision to “the scarcity of foreign currency that the banks are suffering from, and the observed misuse of debit cards by customers outside the country.”

Georgieva: Egypt will deplete its reserves unless it devalues ​​the pound again

Kristalina Georgieva, Director of the International Monetary Fund, warned last Thursday that Egypt would deplete its foreign currency reserves unless it devalued the pound again, despite her praise of the steps it had taken to correct the crisis economy.

Georgieva said in an interview with Bloomberg that the country is postponing the inevitable by refraining from devaluing the pound again, explaining that the long wait makes things worse than they are.

Egypt’s net foreign reserve – whose $470 billion economy is a vital regional hub for energy and trade routes – fell last year to its lowest level since 2017, before stabilizing in recent months at $35 billion in September, meaning it is still declining. More than a fifth of its 2020 high.

However, maintaining the stability of the pound comes at a cost, as this has led to the drain of foreign exchange from the economy by withdrawing the net foreign assets of commercial banks, which shrank in August by more than 5% to $13.1 billion, according to calculations by the research department at HC. ” In Cairo.

Text messages

Banks operating in Egypt have begun sending text messages to their customers to inform them of the new decision to limit the use of debit cards inside Egypt only. Among those banks are the Commercial International Bank of Egypt, Banque Misr, the Arab Bank, the Arab African International Bank, and the Housing and Development Bank. It is expected that the rest of the banks will continue to inform their customers of the decision during today and the next few days.

The number of banks operating in Egypt is 38, including 9 government banks, and the National Bank of Egypt, Banque Misr, and Banque du Caire are among the largest.

Hani Genena, chief economist and strategic analyst at Cairo Capital, attributed to Al-Sharq that the Central Bank’s resort to stopping the use of direct debit cards abroad was due to “a state of panic in the markets during the past two days due to geopolitical tensions in the region… Certainly the Central Bank noticed a jump.” In the draws, so the decision was to stop.”

Moody’s lowers Egypt’s rating as foreign currencies continue to become scarce

The parallel currency market in Egypt was affected by international banks’ downgrades of Egypt’s rating, and the director of the IMF urged Egypt to liberalize its currency. The exchange rate of the US dollar rose to 41 pounds from 39.5-40 pounds at the beginning of last week, according to market traders who spoke to Al-Sharq.

One of the heads of private banks who spoke to Al-Sharq said that “the Central Bank of Egypt has not set a timetable for stopping the use of debit cards abroad,” adding that “the matter is more related to the banks’ foreign liquidity position… and the limits for withdrawing credit cards abroad will be reduced.” also”.

2023-10-09 11:15:00
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