FX in. FX out. Markets continue to adjust to the new post-float norm, with foreign currency entering the country’s official channels, remittances rising, and more banks easing their FX limits.

#1-Float spurs influx of foreign currency at the country’s biggest FX bureaus: Customers have sold over EGP 1.05 bn worth of foreign currency at the National Bank of Egypt’s foreign exchange bureau Al Ahly Exchange, Banque Misr’s Misr Exchange, and Banque du Caire’s Cairo Exchange following the central bank’s decision to float the currency last Wednesday, Al Borsa reports, citing each of the bureaus’ heads. Most of the transactions at the bureaus were USD sales, with SAR and EUR accounting for a smaller portion of the transactions.

#2- Surge in Egypt-bound remittances from the UAE: The UAE’s largest FX bureau and remittances company Al Ansari Exchange has seen a “remarkable increase” in transfers sent from the UAE to Egypt as Egyptian expats go back to using official money transfer channels post float.

Remember: Remittances were down 30% y-o-y to USD 22 bn in 2023 as Egyptians abroad held onto their money or sent it back through parallel mechanisms. The government said it wants to raise remittances — one of Egypt’s biggest sources of FX — from Egyptian expats by 10% each year to reach USD 53 bn by 2030.

#3- More banks ease their FX spending limits: Abu Dhabi Commercial Bank and Abu Dhabi Islamic bank are the latest in line to revise their monthly credit card FX spending limits.

  • Abu Dhabi Islamic Bank has raised the ceiling on FX transactions abroad to USD 3.5k, the bank said in a statement (pdf).
  • Abu Dhabi Commercial Bank has raised the cap on FX spending at home to the equivalent of EGP 3-14.5k — depending on the card’s segment — and FX spending abroad to EGP 8-175k. FX withdrawal limits were raised to EGP 2-3k, according to Al Borsa.

BACKGROUND- The CBE told banks last week they should phase out restrictions on credit card FCY transactions as the country adjusts to a new post-float normal and waves goodbye to the parallel market and foreign-exchange shortages. CIB has relaxed its limits twice since last Wednesday, following a spate of other banks.

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