According to reports, some Egyptian banks recently informed customers planning to travel abroad that they can now withdraw only $2000 or less. The banks also reduced the amount of foreign currency customers could withdraw abroad. The ongoing shortage of foreign currency in Egypt has led some merchants to demand payment in dollars.
Amid growing pressure on the Egyptian pound, banks in the country are reportedly imposing limits on the amount of foreign currency that travelers can withdraw before departure or while abroad. There has been no official announcement about the new limits, but banks have reportedly sent notices to customers informing them of the change.
according to a Reuters report. One of these banks, HSBC, notified its customers that the maximum amount of foreign currency that can be withdrawn for travel purposes is now $1500. Prior to the change, the bank’s customers could withdraw up to $5,000. The report cited two unnamed sources, adding that customers will now only be able to withdraw a maximum of $5,000 when going abroad, down from $10,000.
At Commercial International Bank, customers who planned to travel were told that they could only withdraw the equivalent of $1,000 to $2,000 in forex. Another financial institution, First Abu Dhabi Bank, reportedly lowered the withdrawal limit to $518 (£10,000) in US dollars.
Due to Egypt’s severe shortage of foreign currency and the depreciation of the currency, real estate companies, car dealers, and other merchants have begun demanding payment in foreign currency (). This practice is considered illegal, but according to Ahmed Shiha, Egyptian companies that do this “take advantage of the situation and the needs of their customers for certain products.”
Savings Interest Rates
Instead of charging or demanding U.S. dollars, Shiha suggested linking prices to the U.S. dollar, Shiha said, which would allow customers to pay a higher interest rate on their savings than on the U.S. dollar.
It would have been better for these companies to announce a new price equivalent to the value of the product in dollars at the price adopted on the date of purchase or contract, instead of requiring customers to pay in dollars, because banks would not allow customers to deposit foreign currency of unknown origin.
Meanwhile, another reportreveals that two of Egypt’s largest state-owned banksare now doubling the interest rate on US dollar savings certificates. Banque Misr announced that it has raised the interest rate paid on deposits from 2.25% to 5.3%, while the National Bank of Egypt says it pays about 5.5% interest on savings.
The report relies on the testimony of two unnamed sources, who suggest that the increase is in response to the central bank’s call for financial institutions to introduce instruments to shield the currency from depreciation.
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