A customer counts his U.S. dollar money in a bank in Cairo, Egypt March 10, 2016. E REUTERS/Amr Abdallah Dalsh/
CAIRO, Jul 27 (Aswat Masriya) – The Commercial International Bank (CIB) announced on Wednesday it will reduce the withdrawal and purchase limits for clients using payment cards abroad by almost 50 per cent.
The decision will be implemented starting August, according to the bank.
Several bank staff told Reuters that the move would impact both credit and debit cards as the bank has not specified which cards in its statement.
A number of banks announced similar reductions on the cash withdrawal limit and withdrawal through debit and credit cards for travelers amid an acute foreign currency shortage.
The Egyptian banking system has been suffering from a shortage of dollars since the 2011 uprising that toppled President Hosni Mubarak. Tourism, a vital source of foreign currency, has been direly affected due to political unrest in the past few years as well as the Russian plane crash in October that killed 224 people on board.
Egypt's Central Bank Governor Tarek Amer prompted banks late June to set limits on its clients' usage of foreign currency abroad through debit cards linked to local currency accounts.
"We need vigilance because some clients use debit cards to get large dollar amounts not intended for travel, tourism, or shopping," Amer told MENA at the time.
Egypt depends on imports for a vast array of goods from food to fuel. Many import businesses have turned to the black market to acquire much needed hard currency. However, businesses acquire dollars at a higher price as the pound's rate on the black market has weakened since the central bank devalued the Egyptian currency in March, at which time it was roughly in line with the official rate.
The CBE devalued the pound by about 14 per cent to reach EGP 8.78 against the dollar in an effort to close the gap between the official and parallel rates but the move failed to boost dollar liquidity or close the gap.
Egypt is currently in talks with the International Monetary Fund (IMF) over a lending programme to ease its funding gap and is seeking to secure $7 billion annually in financing over a three-year period. An IMF delegation is scheduled to visit Egypt in a few days to complete negotiations.