Sarah Hamza
Published on: Wednesday, October 18, 2023 – 10:39 PM | Last updated: Wednesday, October 18, 2023 – 10:39 PM
– El-Damaty: The decision represents a blow to manipulators and does not aim to restrict all clients
– Shafie: It will affect importers with the rise in the exchange rate in the parallel market
A number of economic experts agreed that the Central Bank’s recent decision to oblige customers traveling outside the country to coordinate with banks to prove their presence abroad so that they can withdraw their dollar needs, is a decision to defend the green currency from market manipulation by speculators.
The opinions of experts differed regarding the repercussions of the decision, with one of them believing that it will have negative repercussions by increasing demand on the parallel market and thus increasing the price of the dollar there, while two believe that it will not have any negative effects because it does not constitute a restriction on dealers.
The Central Bank directed banks operating in the local market to open and activate the maximum credit limit granted to the credit card for use abroad after the customer coordinates with his bank to prove his travel and presence abroad, in accordance with the regulatory procedures applied by the bank, according to a statement from the Central Bank yesterday. .
The Central Bank indicated that this decision is out of its keenness to meet the needs of citizens and facilitate their use of their credit cards to cover their expenses while traveling abroad, especially in light of what was recently observed of some speculators misusing these cards by making cash withdrawals from abroad without actually traveling.
Mustafa Shafie, head of the research department at “Arabia Online Securities Trading Company,” says that the central bank’s recent decision is one of the legitimate defensive methods for the dollar, but he indicated that the decision will have a negative impact on the local markets.
Shafie believes that although the decision does not impose significant restrictions except on speculators, it will negatively affect the parallel market for the dollar by increasing demand and thus increasing the price of the American currency, saying: “Decisions that indicate the presence of a dollar crisis are followed by a significant rise in prices and inflation rates.” .
He added that reducing the usage limits for credit cards, and before that stopping direct debit cards, pushes dealers to the parallel market for the dollar to meet their needs, which increases the volume of demand for the green currency, which further exacerbates the crisis.
He cited one example of the defense of the dollar by the Central Bank, when it canceled the use of collection documents in import operations in March 2022, and used documentary credits instead, saying: “This was a defensive stance to stop the bleeding of the dollar, but it resulted in an unprecedented rise in inflation rates.”
. While he pointed out that the impact of the recent Central Bank decision is not as strong as canceling collection documents, explaining that it concerns daily personal transactions only, and does not directly affect the trade sector, but it will affect importers with an increase in the exchange rate in the parallel market.
According to “Eqtisad Al-Sharq”, the Central Bank reduced the limits for using “credit cards” in foreign currency transactions inside Egypt to $250 per month.
Local banks had directed customers to stop transaction cards in foreign currencies when using direct debit cards issued on accounts in Egyptian pounds, starting last October 10.
While Sahar El-Damaty, former Vice President of Banque Misr, believes that the recent decision to activate the customer’s maximum credit limit on his credit card once he is certain of his travel outside Egypt, is considered a positive point indicating that banks have the ability to cover the needs of customers abroad in dollars, but the problem was In speculators, as the Central Bank described them in its statement.
She said: “The decision was mishandled to some extent,” explaining that it is not a general restriction on all customers, but rather a blow directed at the manipulators of these credit cards.
She explained that the client was traveling abroad with several credit cards for his friends and relatives, all credit cards in pounds, and then he would withdraw dollars from abroad from those cards, with their value in pounds deducted from him at the official exchange rate, and he would sell the dollars in the parallel market after his return.
She continued: “There is a big difference between reducing the monthly use limit for credit cards for customers inside Egypt, and customers’ withdrawals abroad,” explaining that reducing the limits for using the dollar locally is possible, especially in light of the crisis of the green currency shortage. She continued, “The banks allowed the limit sufficient for use in operations.” Electronic payment, such as subscriptions to platforms and social networking sites.”
She added: Customers’ withdrawals abroad will not differ from their previous times, except that the customer is now required to coordinate with his bank before traveling to prove his presence abroad, pointing out that as soon as this happens, the maximum limit allowed for the card will be opened.
Hani Abu Al-Futouh, a banking expert, agreed with her, saying: “The latest decision is more rational than the decision to cancel direct debit cards,” adding that this time there was no collective punishment because of speculators, while travelers were actually allowed to use their maximum limits in withdrawing green currency to meet their needs.
Abu Al-Futouh explained that the decision had a negative impact on some citizens, thinking that it restricts their dollar transactions abroad, while there is no difference between the new decision and the previous situation, except that there is a tightening of procedures for proving travel, and until the customer proves this with the bank, a maximum monthly limit will be set. To deal in dollars.
He continued: “I believe that the maximum transaction amount in dollars per month is sufficient only for very few needs, and therefore no traveler will rely on it.”
2023-10-18 19:40:47
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