Egypt bans credit card use abroad amid currency crisis
Egypt bans credit card use abroad amid currency crisis
Banks given new directive in effort to preserve much-needed US dollar reserves for imports.
2 min read
Since 2011, Egypt's US dollar reserves have declined sharply [Khaled Desouki/GETTY]
Egyptian authorities have ordered banks to stop customers from using debit cards overseas in order to help combat the country's severe foreign currency shortage, a central bank official has revealed.
"We sent a letter to bank chiefs today to stop the use of debit cards outside the country. As for credit cards it is business as usual and each bank sets their own limit for their clients," the official told Reuters.
Egypt relies on imports for many items including food and fuel, but has suffered from a dollar deficit since the uprising of 2011 against then-President Hosni Mubarak. The instability during the uprising caused foreign investment to slow, as well as Egypt's once-thriving tourism industry.
Many import businesses are now reliant on a black market where cash is procured for a higher price. Since the Egyptian pound's devaluation by Egypt's central bank in March - when both black market and rates were near level - the currency's rate on the black market has weakened.
"Please ensure that debit cards, including pre-paid cards, issued in local currency by Egyptian banks are only used within the country," the letter read.
The new rule still allows debit cards for accounts in foreign currency to be used up to a limit of $100,000, the letter also specified.
"We have started implementing the central bank's directive as of today," said the chief of one state-owned bank.
Several other heads of state-owned and private banks, however, have said that they have requested a few days to be able to implement the directive.
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