Egypt Central Bank Imposes Cash Controls After 30 Billion Pounds Withdrawn in Past Three Weeks

TL;DR: Central Bank of Egypt Governor Tarek Amer explained recently, during an interview on the television program Sada El Balad, how due to 30 billion Egyptian pounds ($1.91 billion) being withdrawn over the past three weeks in the wake a global pandemic, cash controls were to be imposed.  

Egypt Central Bank Imposes Cash Controls

Press reports claim new cash control policies on the people of Egypt are to be “temporary,” as daily limits on movements in either direction, deposit or withdrawals, is in an effort to discourage simultaneous hoarding and possible inflation.

Circular dated 29 March 2020 regarding setting maximum limits for cash deposits & withdrawals within the precautionary measures to counter the effects of COVID-19 virus, issued by the Central Bank of Egypt (CBE), imposes a “daily limit for individuals [of] 10,000 Egyptian pounds ($635) and 50,000 pounds for companies,” Reuters translated, with the CBE exempting businesses from such limits when used for payrolls. The CBE also imposed daily ATM movements to 5,000 pounds.

Central Bank of Egypt Governor Tarek Amer

The North African nation has the largest Arab population in the world, and is still working its way through the Arab Spring political revolution of 2011 that swept out the three-decade reign of President Hosni Mubarak. For the last six years, however, Abdel Fattah el-Sisi, former Egyptian Defence Minister and Commander-in-Chief Egyptian Armed Forces, has run the country after earning slim voting majorities. The country has remained on stable economic ground, albeit under the auspices of increasing military power.

Physical cash refuge and bank runs are commonplace in times of uncertainty. Governments are often torn between allowing freer markets to operate while trying to discourage panic buying and inevitable credit crunches as a result. “We found that individuals are withdrawing money from the banks although they did not need it,” the CBE head stressed, “they withdrew 30 billion pounds in the past three weeks. We want some discipline. We live in a society and we have to think of others.” Amer said. The central bank is urging Egyptians to use electronic payments and transfers instead.

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