Wednesday, January 30, 2013

Banking in Egypt and disappearing foreign currency reserves

I read and heard about it but I was not fully aware of the consequences for myself. I mean, a bit of course… As I do with so many problems – Egypt has taught me this – I wanted to wait and take things as they come, trusting that there is always a solution.

My rental payment is due at the beginning of February. Progressive-minded as I am I wanted to transfer the rent from my Egyptian bank account by E-Banking. Before, I wanted to change some Euro – in the same bank – into Egyptian Pounds to provide enough funds. Since I divined the consequences already a bit before, I did not change my Euros in December since a fast devaluation of the Egyptian Pound was looming. I’m almost a bit proud that I haven’t transferred more hard currency to Egypt. They would be blocked right now!

My bank kindly informed me that according to the Egyptian Central Bank’s provisions, customers are not allowed to change their foreign currencies into Egyptian Pounds by E-Banking! No access to the strong Euros, US Dollars and other stable currencies that are lying in the mouldering country. So what do business people do? These provisions make business lifes even more difficult in addition to all other problems and deficiencies.

I just remember one of my „students“ telling me before my departure about the payment moral: for credits of several hundreds of pounds due he obtains now and then a cheque of five thousand Pounds… Actually, it’s a miracle that everybody somehow still keeps afloat. Yet for how long will they?

For sure there is a solution for my small problem. I sent a message to the bank and explained my desire; maybe the transfer will be permitted. If not, I’ll find another way. Probably this is the way for business people, too: Necessity is the mother of invention.

1 comment:

  1. Yes,the road to financial recovery in Egypt is shaking but at the same time global private banks are pushing hard to establish a foothold in the egyptian banking space. With Barclays and HSBC making huge investments in the banking sector in Egypt, FDI should witness a huge boost


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