The Central Bank of Egypt (CBE) has recently issued new instructions to regulate the use of credit cards for transactions in foreign currencies abroad. This comes amid concerns of misuse, as the CBE has noticed that some users have been withdrawing cash from abroad without actually traveling.
As per the new instructions, customers should inform their bank of their travel plans in order to open and activate the maximum credit limit for use abroad. Each bank will determine the credit limit for its customers.
The CBE has instructed banks to inform their customers of the limit of their domestic transactions. For instance, state-owned National Bank of Egypt (NBE) has limited domestic transactions to $250 per month.
Banks in Egypt have been increasing withdrawal and purchase limits on cards used outside the country due to severe foreign exchange shortages. However, in early October, several local banks suspended hard currency cash withdrawals and purchases made outside Egypt using debit cards, as per instructions from the CBE. This was to reduce pressure on foreign currency reserves.
Egypt’s foreign asset deficit amounted to nearly $25.92 billion in August. In the official market, the USD stands at about EGP 31, while it hovers around EGP 40 in the parallel market.
