Major Egypt banks suspend debit-card use abroad to stop drain on foreign currency

Egypt’s biggest lenders including Commercial International Bank SAE and Banque Misr suspended the use of local-currency debit cards abroad, as the cash-strapped North African nation races to stop a drain on foreign exchange.

CIB, the country’s largest private bank, told account-holders by text message that effective Tuesday their debit cards could only be used for Egyptian pound transactions within the country.

Arab Bank also stopped international transactions for debit cards, according to a statement on its website, while a customer representative for state-owned Banque Misr said it was doing the same.

Banque du Caire, Credit Agricole, and QNB Alahli took similar actions, they told customers in messages. Credit cards can still be used.

The lenders gave no official reasons for the moves, which come as Egypt is mired in its worst foreign-exchange crunch in years. Authorities have devalued the pound three times since early 2022, with the currency losing almost half its value against the dollar.

The pound’s stability in recent months has come at a cost, draining the economy of foreign exchange through a drawdown of commercial banks’ net foreign assets, which shrank in August by over 5 percent from the previous month to $13.1 billion, according to calculations by Cairo-based HC Research. Their net foreign liabilities hit an all-time high in June.

The government is racing to unlock more financing from a $3 billion International Monetary Fund rescue package and sales of state assets to Gulf nations including the United Arab Emirates.