Banks across Egypt have suspended debit cards in Egyptian pounds abroad to stop the drain of foreign currencies.
A large number of direct debit card holders recently used their cards for large purchases of gold, mobile phones and other products to take advantage of official low exchange rate of the Egyptian pound compared to the black market.
The National Bank of Egypt, Banque Misr, the Arab African International Bank, HSBC, and the Commercial International Bank have stopped all transactions in foreign currencies using instant debit cards abroad, but have continued to allow its use inside Egypt for purchases and cash withdrawals.
The National Bank of Egypt maintained the limits of withdrawals and local purchases made via seven direct debit cards, including the local Meeza card.
- The daily maximum limit for purchases on the debit card from the National Bank of Egypt reached LE150,000, while the maximum daily cash withdrawal on the classic direct debit card has reached LE15,000.
- The National Bank of Egypt set the maximum limit on the gold direct debit card at LE20,000 for local cash withdrawals, and at LE200,000 for local purchases.
- The National Bank set the maximum withdrawal limit on the Platinum debit card – issued by Visa and MasterCard – at LE20,000 and local purchases at LE300,000.
- Local transaction limits on the World direct debit card reached LE20,000 on daily cash withdrawals, and LE400,000 for purchases.
The decision of some banks to stop transactions on direct debit cards abroad reflects the Central Bank and the banking sector’s intention to reduce the consumption and use of foreign exchange for non-strategic or unjustified purposes and to eliminate all attempts at misuse by certain card holders, explained banking expert Mohamed Abdel Aal.
Abdel Aal told Al-Masry Al-Youm on Monday that this decision is limited to direct debit cards only linked to customer accounts in Egyptian pounds, whether for cash withdrawals from ATMs abroad or purchases from commercial stores, via POS devices or electronic commerce.
The decision does not apply to credit cards, for which Egyptian banks have previously set strict controls that included setting maximum limits for cash withdrawals, and increasing the rate of fees and commissions imposed on transactions carried abroad through credit cards, he said.
According to Abdel Aal, the decision is a response to new and severe geopolitical conditions in the region and the economic pressures Egypt is currently facing, especially from the International Monetary Fund and credit rating agencies.
It also represents an indirect message to those interested in Egyptian affairs locally and externally that Egypt does not have the luxury of draining or leaking any amount of foreign exchange for non-strategic purposes, he added.
Edited translation from Al-Masry Al-Youm
