The Egyptian Government devalued its currency for the fourth time since early 2022, after a massive interest-rate hike by the central bank.
The pound plummeted about 26.5% —a record low of 42 per dollar as of 10:35 am in Cairo on Wednesday, having traded at about 30.9 since 2023.
Earlier, the central bank increased its rates at an unscheduled meeting and said it would permit the market to control the exchange rate.
A news outlet, Gulf News gad reported that the move on Wednesday increased the key rate by 600 basis points to 27.25%. A statement by the central bank had also said that unifying the nation’s exchange rates was vital.
Currently, authorities are looking to alleviate a dire shortage of hard currency and obtain a new multi-billion-dollar loan from the International Monetary Fund —IMF.
The devaluation now takes the pound closer to its value on the local black market, where it exchanged hands for around 45. The IMF has supported Egypt to strengthen its monetary policy to counter an inflation rate of almost 30% and approve a more flexible official exchange rate.
Meanwhile, the Monetary Policy Committee said it had “decided to speed up the monetary tightening process to fast-track the disinflation path and ensure a decline in underlying inflation.”
