Two Egyptian banks, Arab African International Bank and Arab International Bank, have temporarily suspended the use of Egyptian pound debit cards outside the country in response to the worsening currency shortage. This decision comes as a measure to prevent a drain on foreign currency reserves. Debit card holders have been exploiting the official exchange rate, which is significantly lower than the black market rate, to make bulk purchases in countries like the United Arab Emirates, including gold and mobile phones. This move is part of broader efforts by banks in Egypt to address the currency shortage, and it is expected that more banks will implement similar restrictions in the coming week.
The suspension of debit card use abroad reflects the challenges faced by Egyptian banks due to the widening gap between the official exchange rate (about 31 pounds to the dollar) and the black market rate (around 40 or 41 pounds to the dollar). As the country has maintained its fixed exchange rate against the dollar since March, these measures are aimed at conserving foreign currency reserves. Additionally, banks in Egypt have been tightening restrictions on the amount of foreign currency clients can purchase within the country and the limits on credit card usage for international transactions.