The Arab African International Bank (AAIB) is one of the banks enforcing this. According to a memo,
The decision aims to prevent abusive use of debit cards outside Egypt to benefit from the difference in the exchange rate between the official and the parallel markets, thus draining the foreign currency reserves at the Egyptian banking system.
Travelers can secure their needs of foreign currency through the bank branches before departing, as per the directives of the Central Bank of Egypt (CBE).
A source told the Ahram Times
The Commercial International Bank (CIB) also sent a message to its customers explaining that starting on October 10th transactions in foreign currencies ‘will be suspended when using Direct Debit Cards issued on accounts in pounds, and the use of the Direct Debit Card will be limited to transactions in pounds only, within Egypt,’ Egypt Today reported.
The AAIB ‘set new cash withdrawal limits abroad that range from EGP 11,000 (USD 355) and EGP 33,000 (USD 1,067) per month, according to the different tiers of cards,’ Egyptian Streets reported.
The paper added, ‘Multiple banks, including Banque Misr, the National Bank of Egypt, and HSBC set withdrawal and purchase limits abroad, ranging from EGP 3,092 (USD 100) to EGP 30,944 (USD 1000) for the lowest tier and EGP 12,000 (USD 400) to EGP 46,416 (USD 1500) for the highest tier.’
The outlet added, ‘several other banks also sent messages announcing the decision to suspend the use of Debit Cards outside Egypt, including the Arab Bank and the Housing and Development Bank.’
Furthermore, the publication noted:
The heads of banks operating in Egypt confirmed the issuance of verbal instructions from the Central Bank of Egypt to the banks operating in the country to stop using “Direct Debit Cards” for customers abroad, with its use limited to within Egypt only, without specifying the time frame for implementing this directive, according to Asharq Business with Bloomberg.
This decision comes at a time when Egypt is facing difficulties in providing hard currency, and banks are struggling to provide currency to their customers. In addition, the Central Bank of Egypt (CBE) has identified the misuse of debit cards outside the country.
Egypt is experiencing a severe crisis in the US dollar, which has led to drastic decisions such as the application of documentary credits for imports and a gradual reduction of withdrawal limits for individuals outside the country, as well as the imposition of a management fee estimated at 10 percent of the value of the required foreign currency, whether for importers or individuals. This has led to the growth of a parallel market for foreign currencies, with the US dollar at the forefront, and a significant shortage of greenbacks.
At the end of May 2022, the CBE announced the suspension of the use of prepaid cards outside Egypt, and most holders of these cards do not have bank accounts. The number of these cards in Egypt is estimated at about 25 million cards.
This news comes after Egyptian President Abdel Fattah el-Sisi explicitly said that citizens need to accept hunger and thirst to achieve progress.
Don’t you Egyptians dare say you would rather eat than build and progress. If the price of the nation’s progress and prosperity is to go hungry and thirsty, then let us not eat or drink.
Don’t undermine the cause of our nation and make us the world’s laughing stock. Stand fast and transform the cruel circumstances we are going through into a gift. The harder you stand fast, the sooner it [the economic crises] will pass.
He said
AUTHOR COMMENTARY
For a nation to do something like this tells you just how severe the problem is. Nations around the world are facing a severe liquidity crisis, only getting worse as interest rates rise in the U.S. Therefore, do not be surprised if more nations do this.
The rich ruleth over the poor, and the borrower is servant to the lender.
Proverbs 22:7
[7] Who goeth a warfare any time at his own charges? who planteth a vineyard, and eateth not of the fruit thereof? or who feedeth a flock, and eateth not of the milk of the flock? [8] Say I these things as a man? or saith not the law the same also? [9] For it is written in the law of Moses, Thou shalt not muzzle the mouth of the ox that treadeth out the corn. Doth God take care for oxen? [10] Or saith he it altogether for our sakes? For our sakes, no doubt, this is written: that he that ploweth should plow in hope; and that he that thresheth in hope should be partaker of his hope. (1 Corinthians 9:7-10).
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This reminds me of the 7 years of famine in Genesis.