Egyptians Seek Alternative Solutions Amid Dollar Scarcity

Some companies and consumers in Egypt, who need to settle payments in foreign currency, resort to increasingly complex solutions as banks impose more restrictions on the use of scarce dollars, according to a report by Reuters.

Earlier this month, some Egyptian banks reduced the limits of credit cards in foreign exchange transactions that are conducted domestically and internationally, with some credit limits reaching as low as $50 per month.

Restrictions have paralyzed some companies and complicated the lives of citizens who strive to pay for everything from education to honeymoon travels.

Heba Abu Al-Eid, the founder and owner of “The Mommy Club” company, an online platform that supports mothers, said that credit card limits have affected the company’s marketing capabilities, which rely on paid subscription accounts in dollars for companies like Google and Rakuten.

Despite using her mother and husband’s credit cards, she had to reduce the number of registered users for her company from 25 to 10 subscribers, resulting in a slowdown in business operations.

Ahmed Ismail, a media buyer in a small digital marketing agency, stated that his company utilizes credit cards owned by family and friends to pay for digital advertisements.

Company Ismail monitors the used cards through Excel program to track when they were last used, but with the new limitations, they are no longer able to continue paying.

Ismael said, “We may start buying credit card limits now. It has become extremely difficult,” adding that credit card limits are being traded on Facebook groups for 2100 Egyptian pounds ($68.07).

Some Egyptians resort to other methods, such as opening a bank account abroad or relying on friends and family who live abroad.

They can also use a foreign currency account in one of the Egyptian banks, but they will have to buy the currency from the black market.

In recent times, the black market exchange rate for buying the dollar has been fluctuating, reaching 65 Egyptian pounds compared to the official rate of 30.9 pounds.

In both cases, they paid off the cost in foreign currency that they bought through the black market.

Egypt has been suffering from a long-term shortage of dollars. Its main sources of foreign currency, such as natural gas exports, tourism, remittances from overseas workers, and revenues from the Suez Canal, have been under recent pressure.

Over the past two years, the restrictions imposed on accessing the dollar have hindered Egypt’s imports of goods and raw materials, causing the country to postpone moving towards a more flexible exchange rate.

The Kuwaiti Al-Shaia Group announced this month that it would scale back its operations in Egypt, where it holds franchises for prominent Western brands such as Starbucks and H&M, due to the economic situation and difficulties faced by foreign companies operating in the country.