Egypt CIB limits the use of bank cards abroad

FX shortage bites

Egypt’s largest listed bank, Commercial International Bank (CIB), became the latest lender yesterday to reduce the amount of foreign currency customers can spend and withdraw abroad using debit and credit cards. Egypt has suffered from a shortage of dollars in the banking system that has sapped its ability to import since a 2011 uprising drove away tourists and foreign investors, both crucial sources of hard currency.

Last month, Egypt’s central bank wrote to bank chiefs asking that they “ensure that debit cards, including pre-paid cards, issued in local currency by Egyptian banks are only used within the country.” The central bank later said the letter was not intended to signal a blanket ban on card use, but instead a request that banks prevent individuals from misusing debit cards to acquire large quantities of foreign currency while abroad.

CIB’s move follows similar measures taken by a number of other banks last week, including Emirates NBD Egypt. CIB told clients yesterday that it would change the limits for purchases made in foreign currency using the bank’s cards from Aug 1. It did not specify which cards would be affected or give the new limits, but several bank staff told Reuters that the move would impact both credit and debit cards with limits cut by about 50 percent.

CIB cut Classic Card owners’ maximum purchases outside of Egypt to $2,500 a month from $5,000, and $3,500 a month from $7,500 a month for Gold Card owners.

A bank official, speaking on condition of anonymity, attributed the CIB limits to “compatibility with the market trend in the rest of the banks.” Egypt’s foreign currency reserves have halved since the 2011 uprising to about $17.5 billion. Emirates NBD Egypt told customers last week that it would suspend use of Egyptian credit and debit cards abroad entirely, but later rowed back on the decision and said it would set new limits instead. — Reuters