CBE Eases Limits on Foreign Currency Credit Card Use

The Central Bank of Egypt (CBE) directed local banks to open limits on the use of foreign currency credit cards, in a new step towards enhancing the stability of the local exchange market, according to Egyptian media.

The Central Bank’s directives come within the framework of a comprehensive economic reform program that is being implemented, in coordination between the Central Bank and the government, with the support of bilateral and multilateral partners, and after providing the necessary financing to support foreign exchange liquidity.

On Wednesday morning, the Central Bank of Egypt raised interest rates by 600 basis points, equivalent to 6%, to reach levels of 27.25%.

These instructions came after banning the use of credit cards abroad for a period exceeding 5 months in light of measures taken by the Central Bank of Egypt last October to restrict the use of foreign currencies and stop fraudulent operations to leak currency abroad.

The Central Bank said, “The announced monetary policy decisions come within the framework of a comprehensive economic reform package in coordination with the government and with the support of bilateral and multilateral partners.”

It stressed that unifying the exchange rate contributes to ending the accumulation of demand for foreign exchange and accelerates inflation’s downward path.

The Central Bank's Monetary Policy Committee believes that the decision to raise key interest rates will help restrict monetary conditions in a manner consistent with the targeted path of reducing inflation rates.

The dollar exchange rates approached the 50-pound barrier in the transactions of 14 banks in Egypt when the report was written.