It seems that the economic crisis in Egypt is increasing, especially with regard to the shortage of the dollar and the depreciation of the pound.

This crisis was revealed by the complaints of many Egyptian travelers abroad, especially those who take short trips or visits, due to the amendment of withdrawal limits on bank cards and their notification of this via short text messages for the second time, without prior warning.

The Central Bank of Egypt justified this step by claiming that it would confront the exploitation of these cards in buying and selling operations, but the decision caused confusion in the accounts of some travelers, and the occurrence of problems for others due to their inability to manage their daily expenses.

For the second time in a row.. Banque Misr and Al-Ahly Bank reduce the limits for withdrawing #dollar cards outside Egypt, while raising the commission rate to 10% of the total value of cash withdrawals, according to local newspapers

- Al-Jazeera Egypt (@ AJA_Egypt) December 22, 2022

Reduced cash withdrawal limit

Most of the banks operating in Egypt had taken a similar step in early October, by reducing the limits of withdrawals on credit cards and direct withdrawals in withdrawals and purchases from abroad, by a rate ranging from 50% to more than 90%, but without changing the prescribed commission rate or Fees.

The banks’ decision in Egypt to reduce the limits of cash withdrawals and purchases from credit cards coincided with raising the commission rate to 10% of the total value of cash withdrawals and purchases, in addition to the commission of 3% of the total withdrawals for using a machine outside Egypt, in addition to imposing a fee of 50 pounds on each transaction. Withdraw (1 dollar = 24.77 pounds).

Cash withdrawal limits on some types of cards from ATMs outside Egypt decreased to only $100 per month from $500, and decreased to $250 instead of $750, and to $500 instead of $1,500 in some banks, depending on the type of card.

The decision taken by the majority of local and foreign banks in Egypt comes shortly after the decision of the Central Bank of Egypt to raise interest by 300 basis points (3%) at once, in the largest increase of its kind during the current year, bringing the total increase to 8%, which is the highest increase in the region. .

For the fourth time this year, the Monetary Policy Committee of the Central Bank decided - last Thursday evening - to raise the interest rate by 300 basis points (3%), to 16.25% in the event of deposits, and 17.25% on lending, contrary to all expectations that were expected to be raised between 1% and 2% only.

The Central Bank of Egypt said - in a statement - that it aims to reduce inflation rates after the recent increase in inflationary pressures on the demand side, which was reflected in the development of real economic activity, compared to maximum production capacity, and in the rise in prices of many items of the consumer price index, and on Increasing domestic liquidity growth rates.

"It is not useful for an onion." A citizen tells of a situation that an Egyptian elderly man faced while performing Umrah, calling for a review of the withdrawal limit from banks outside #Egypt

- Al-Jazeera Egypt (@ AJA_Egypt) December 24, 2022

What is behind the decision?

In her estimation, the former Vice President of Banque Misr, Sahar El-Damaty, says, "This measure taken by banks in Egypt is a temporary measure under the current circumstances, in order to confront some people's exploitation of the limits of withdrawals on credit cards and direct withdrawals in commercial operations, not for living."

In her interview with Al-Jazeera Net, El-Damaty explained that this is not the first time that banks in Egypt have resorted to such a decision, as they had previously taken it earlier this year and in 2017;

All of these are measures aimed at reducing the bleeding of the dollar outside the country and preserving the hard currency.

With regard to the harm to some Egyptians traveling abroad, the banking expert indicated that any decision has positive and negative aspects, and the aim of the decision is not to harm the Egyptian economy by buying gold or currencies abroad, and then reselling them on the black market inside Egypt.

However, she confirmed that with the increase in the withdrawal limits for several days until the return of some of those stranded abroad, especially after the complaints of some of their inability to complete their journey or the procedures for their return to the country increased, adding, "I do not rule out that the Central Bank of Egypt will intervene to solve the problem."

The Central Bank seeks - through these controls - to reduce the demand for dollars and not to exploit withdrawals and purchases for purposes other than daily living abroad, as well as to reduce the large gap between the official dollar price in banks and in the parallel market, which ranges between 25% and 30%, which negatively affects on Egypt's financial situation.

Tightening controls

The repeated complaints prompted some media professionals and activists to talk about the crisis of some of those stranded abroad, and their inability to provide transportation and return expenses despite having money in their personal accounts, but it is restricted, according to the new regulations, and they do not benefit from it.

The Central Bank of Egypt attributed this step to what was observed of the use of some credit cards and direct debit cards in operations outside Egypt, despite the presence of customers who own these cards inside the country, as well as the misuse of these cards, in addition to procurement of currency for some customers for the purpose of traveling abroad, and then It becomes clear later that they did not leave the country.

The Central Bank called on local banks to review a sample of the uses of those cards that took place outside the country, as well as requests for currency management for travel purposes since the first of December, and in the event that it is verified that the customer has not traveled or misused the cards, the bank will be directed to stop dealing on The card and informing the customer of this, as well as informing the Egyptian Credit Inquiry Company (I-Score) and taking all necessary measures in this regard.

Some local websites also pointed to some misuse of the dollar crisis by buying gold or products abroad at the official price of the dollar, and then reselling it inside Egypt at the black market price, and thus profits are collected from the country's cash reserves.

The annual core inflation rate continued to rise to 21.5% last November, the highest rate in 5 years, and the inflation rate was affected by the depreciation of the Egyptian pound, the increase in the money supply, in addition to the continuing negative effects resulting from the outbreak of the Russian-Ukrainian war, according to a statement. central bank.

After the decision to reduce the withdrawal limit from payment and credit cards abroad to 10,000 pounds, an Egyptian businessman will not be able to rent a car at the airport, and too many payments for Egyptian cards abroad will be refused, regardless of the Egyptians’ movement and work with foreign companies, this is a fatal blow to the reputation of merchants and the state # Pound # Egypt

- samy atya (@samyatya) December 22, 2022

Other controls on gold

This step comes days after the Central Bank sent a periodic letter to the boards of directors of banks regarding the proceeds of export operations from the sale of gold, and it includes reporting to non-complians in the event that the proceeds of gold export operations are not received within a maximum period of 7 working days from the date of shipment, instead of 6 Months, and after the bank followed up with the customer in this regard without success, with a maximum of 3 working days.

And in the event that the customer violates the new instructions and does not comply with the latest controls, the Central Bank of Egypt will circulate to the banks of the banking system to include the customer in the lists of clients of failure, in order not to carry out any similar operations for the customer and the group in the future.

The situation of the Egyptians outside the country now.. By God, I am not stingy. I am an Egyptian who has withdrawn my visa for $100 a month. I just need a bus fare to get to the airport to go.

#Egyptian #Central _ Bank #Egypt

- Mohamed Adam (@M0adam1) December 24, 2022

"How do I eat and drink?"

A citizen abroad complains of being denied access to his money via a bank card

- Rassd Network (@RassdNewsN) December 25, 2022