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Investing.com – Egyptian banks made a surprising decision as part of a series of extended decisions over the past week before and after the central bank’s decision last Thursday to raise interest rates by 300 basis points.
According to the news, CNBC Arabia said it has seen data saying Egyptian banks have restricted international spending on credit and instant debit cards for certain categories of merchants, including jewelry merchants.
This comes amid a violent escalation by the Central Bank of Egypt and Egyptian banks operating under the bank’s umbrella, aimed at curbing the black market that enflamed the foreign exchange market last week.
gold resolution
The Central Bank of Egypt addressed a letter yesterday Sunday to banks under its regulatory umbrella, in light of the violent fluctuations in the country’s gold markets, which have caused prices to reach unprecedented levels.
According to the directives of the Central Bank, in the event that the proceeds of export operations relating to gold do not arrive within a maximum period of 7 working days from the date of shipment, and after the bank follows up with the customer for only the next 3 working days, it must inform the Central Bank.
According to the decision of the Central Bank, the bank must inform various other entities, including: the Ministry of Commerce and Industry, the Customs Agency, and the Stamps and Scales Authority, to take the necessary measures, and the new decision means depriving the infringing source of gold from being exported again.
The decision helps to provide dollar income for the importation of important products, such as foodstuffs and production raw materials, and to reduce pressure on prices, which have been recording continuous increases for several months.
Use of cards
The Central Bank of Egypt stressed that banks should inform customers by any means of communication that the misuse of credit cards and direct debit cards is prohibited, especially for customers who do not leave the country.
The bank said in a statement that this is part of reports that there are uses of some credit and direct debit cards in operations outside Egypt, despite the presence of customers with these cards abroad. inside the country.
The Central Bank added: “It is forbidden to request the procurement of currency for travel abroad without leaving the country and banks must examine a sample of the uses of these cards that occurred outside the country, as well as requests for procurement of currency for travel purposes from 1 December 2022.
The Central confirmed that in the event that the bank detects the presence of increasingly frequent uses which contradict the nature of the customer’s uses and which indicate the suspicion of improper use by the customer of the card or currency it has procured, especially in case there are indications that the client has not left the country, then the bank must inform the central administration to collect the credit risks of the central bank with complete data on these clients, and any other cases that arise in so on its date.
commission increase
Banque Misr and the National Bank of Egypt have increased the commission rate on dollar cash withdrawals and purchases outside Egypt to 10% instead of 3%.
According to the data, the fee is deducted from the total value of cash withdrawals and purchases outside Egypt using direct debit cards (linked to the customer’s account) and credit cards known as credit cards (purchases).
The measure aims to tighten restrictions on the use of foreign currency outside Egypt, at a time when banks are having difficulty obtaining dollars.
other decisions
- Changing foreign currency cash withdrawal limits on all cards
- – Modify the limits and restrict the use of cards to some purchases from abroad.
- The Central Bank of Egypt has called on banks to verify foreign purchases for customers via their bank cards and to ensure that they have actually left the country during the times of the purchases.
pound on the black market
Reports from local newspapers and the Egyptian media have revealed that the price of the dollar on the black market is subject to violent and continuous falls in the direction of the price parallel to the official market.
Within a week, the black market dollar’s exchange rate fell by more than £12, taking the exchange rate from levels of £38 to the dollar to levels close to £26 to the dollar.
Black market dollar exchange rates were trading levels close to £38 per dollar before the fund’s loan signing, with no actual enforcement, Reuters reported late last week.
While CNB Arabia said the dollar’s black market exchange rate surpassed £33 per dollar levels, in a fierce state of speculation in light of expectations of a third listing of the local currency.
While Al-Arabiya TV said a state of confusion had dominated traders and dollar dealers in Egypt’s parallel foreign exchange market as the dollar’s exchange rate continued to fall to the £29 level, down from £38 on Friday last.
Traders manipulate
Former adviser to the central governor, Hisham Ezz Al-Arab, revealed that some importers obtained the dollar exchange rate from banks at the official rate and held consumers responsible for the final product at black market exchange rates.
A member of the board of Commercial International Bank (EGX): “Money is one of the means of monetary policy, and it is a means and not an end, and added that the local currency is two pounds cheaper than its value against the dollar.”
Hisham Ezz Al-Arab said the black market has been imposing unwarranted numbers as the situation has been exploited, and rumors have been raised to profit from it, such as the two leaks on the Central Bank’s extraordinary meeting last Thursday evening, and before that that the IMF would not accept the program with Egypt.
Ezz Al-Arab said the main goal of the government and the central bank is to stabilize prices by targeting inflation, stressing that the current problem is the existence of a funding gap following the outflow of hot money just before the war and global inflation.
