04:52 PM
Friday 26 August 2022
I wrote – Manal Al-Masry:
Bankers, whom Masrawy spoke to, interpreted the Central Bank’s decision to ease restrictions imposed on withdrawals and cancel the maximum transactions on deposits for companies and individuals from bank branches and automated teller machines, which were established regarding two and a half years ago.
On Thursday, the Central Bank decided to cancel the maximum limits on deposit operations for individuals and companies in bank branches and automated teller machines.
The decision also included increasing the daily maximum limit for cash withdrawals for individuals and companies from bank branches to 150 thousand pounds instead of 50 thousand pounds, while maintaining the daily withdrawal limits from ATMs unchanged at 20 thousand pounds, with the aim of facilitating citizens and companies following the decline of the Corona crisis.
Revitalizing the economy and raising interest rates
Bankers said that the decision aims to revitalize the economic movement and accelerate the production cycle on the one hand, as well as withdrawing liquidity and preparing for raising interest rates in the coming period to face the high rate of inflation.
However, bankers believe that doubling the withdrawal limits three times from the previous one will not have any effect on increasing liquidity in the market and increasing the rate of inflation, as the decision aims to give flexibility to companies.
A member of the board of directors in one of the private banks told Masrawy that the Central Bank’s lifting of restrictions on withdrawals from bank branches aims to revitalize the economic cycle and dispel stagflation.
He explained that this decision will alleviate the suffering caused to many companies to finance their needs in light of withdrawal restrictions that have stifled their business.
The member of the board of directors ruled out the impact of canceling withdrawal restrictions on the rise in inflation to increase the volume of liquidity, as this decision targets companies more than individuals who have already started rationalizing their expenses following increasing prices.
The head of the treasury sector in a foreign bank believes that the Central Bank’s lifting of deposit restrictions on companies and individuals in bank branches and ATMs aims to absorb liquidity in preparation for raising interest in the next meeting, which is the main objective of it.
This decision came in addition to the circular issued on April 22, 2020 regarding the maximum limits for cash withdrawals and deposits for individuals and companies in banks and automated teller machines, which was implemented for a temporary period as part of the precautionary measures to confront the Corona virus pandemic.
Tariq Amer, the former governor of the Central Bank, who submitted his resignation from his position on Wednesday of last week, had the effect of these instructions to reduce cash withdrawals, which is one of the means of transmitting the Corona virus, as paper is one of the tools that help in transmitting the virus and motivates more to mechanize their payments.