US Decision on Banque Misr Sparks Concern and Waiting in Egypt
The US proposal to cut off correspondent banking access for Banque Misr's UAE branches has been met with concern in the Egyptian banking market, with wide-ranging implications from exchange rates to international transfers.
The proposal by FinCEN, operating under the US Department of the Treasury, to sever correspondent banking access for Banque Misr's branches in the United Arab Emirates has sparked concern in Egypt. Although the proposal does not directly cover the parent bank, experts note that it could generate negative impacts on international reputation and costs.
FinCEN's Banque Misr UAE Decision Proposal
The Financial Crimes Enforcement Network, operating under the US Department of the Treasury, proposed a regulation that would cut off correspondent banking access in US financial institutions for five branches of Banque Misr operating in the UAE.
While the proposal does not cover the parent bank in Egypt or its operations in other countries, the five branches in question are collectively defined as Banque Misr UAE, and comments on the regulation can be submitted until October 1.
Allegations Regarding Iran's Shadow Banking Network
The US Department of the Treasury claims that Banque Misr's UAE operations conducted approximately $1.8 billion in transactions between January 2024 and June 2026 on behalf of 103 companies that could be part of Iran's shadow banking networks.
FinCEN described these branches as a significant channel for Iran's access to dollars, while Treasury Secretary Scott Bessent stated that economic pressures on Iran and the process of targeting financial institutions would continue.
Reflections on the Egyptian Banking Market
Financial experts evaluate that although the measure remains limited to activities in the UAE, it could create indirect effects on the bank's international reputation, money transfers, and correspondent banking relationships.
While warnings are issued that costs could increase in terms of money transfers by Egyptians working in Gulf countries, investments, and foreign trade transactions, the exchange rate of the dollar in Egyptian banks rose above 51 pounds.
Statements from the Central Banks of Egypt and the UAE
The Central Bank of Egypt announced that the US proposal only covers Banque Misr's activities in the UAE and does not affect the parent bank in Egypt.
The Central Banks of Egypt and the UAE reported that they are in full coordination regarding Banque Misr's branches in the UAE and that the branches continue their operations normally.