CBE spots illegal foreign exchange trading schemes

Hossam Mounir
7 Min Read

The Central Bank of Egypt (CBE) said on Monday that it has monitored illegal foreign exchange trading schemes that aim to destabilize the country’s monetary and financial stability, stressing that it has taken required legal measures to stop those violations.

The Central Bank stated, in a statement today, Monday, that a steady increase in the uses of credit cards and direct debit cards outside the country was observed, despite the presence of customers for whom these cards were issued inside the country, as it reached its peak in the middle of last week, with amounts amounting to $55m in one day, an increase of more than 5 times the daily average in the last quarter of the previous year, which indicates the misuse of these cards, and this necessitated taking procedures and controls that prohibit the misuse of credit cards and direct debit cards for customers who prove not to leave the country, as well as the provisions of control over requests for the provision of foreign exchange for the purposes of travel abroad.

The Central Bank confirmed that the necessary measures will be taken in coordination with the concerned authorities to verify whether the customer has traveled or not, and in the event that it is verified that the customer has not traveled or misused the cards, dealing on the card will be stopped, and the Egyptian Credit Bureau will be informed, as well as the concerned authorities, to take all necessary measures. necessary procedures in this regard.

The Central Bank also issued strict instructions to banks to take into account the setting of sufficient limits to meet the actual needs of customers in foreign exchange, especially for the purposes of education and treatment, through cards, while maintaining the previous limits for customers who are abroad before the issuance of the new controls on 22 December 2022, as well as not adhering to any limits on cards for customers who have accounts in foreign currency and whose uses are paid in the same currency.

It pointed out that it was also monitored that some people trade goods inside Egypt in foreign currencies, in addition to monitoring violations in money transfers from Egyptians residing abroad, through illegal channels who are not authorized to carry out these transfers, in violation of the text of Article 212 of the Central Bank and Central Bank Law promulgated by Law No. 194 of 2020, stipulating for its violation a prison sentence of no less than three years and no more than ten years, and a fine of no less than EGP 1m and no more than EGP 5m, or the amount of money subject of the crime, whichever is greater, for everyone who deals in foreign exchange outside banks approved or licensed entities, or practiced money transfer activity without obtaining a license in accordance with the provisions of Article 209 of this law.

According to the CBE, it has also been monitored that some have established companies of a special nature outside the country that carry out mediation, especially in the fields of export and tourism, and aim to keep foreign exchange outside the country and deal with it outside the legal framework. In addition, some of these companies request foreign exchange from the banking sector despite the fact that it retains accumulated earnings of foreign exchange abroad. In the event that this is proven, all prescribed measures will be taken against these companies and their shareholders.

The Central Bank confirmed that the banking system has played an effective role in releasing goods in ports worth about $5bn since the beginning of this month, to meet the needs of the market.

On the other hand, the Central Bank of Egypt affirmed that the confidentiality of bank customers’ accounts in Egypt is inviolable, for which the Central Bank and Banking System Law has set strict guarantees to protect them, as it guaranteed the protection of confidentiality of banking sector customers’ data, accounts, deposits, trusts, and safes in banks, as well as the confidentiality of related transactions. The law also stipulates that it is not permissible to view it or give data about it to any party, directly or indirectly, except with a written permission from the owner of the account, deposit, trust, or treasury, or from one of his heirs, or from one of the legatees for all or some of these funds, or from his representative or based on a court ruling or arbitral award.

The Central Bank stressed that it closely monitors developments in the foreign exchange market, and that it takes all necessary measures to confront any practices harmful to the national economy, as well as taking all necessary measures to control the market and achieve stability in monetary conditions in the near future.

The Central Bank called on citizens to exercise caution and not to fall behind any practices aimed at achieving quick profits through illegal means. In order to preserve their money and to avoid falling under the law.

The Central Bank emphasized the strength and solidity of the banking sector and its ability to withstand all shocks, in order to ensure the preservation of deposits of bank customers in various currencies.

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