Egypt has devalued its currency by 48 percent, meeting an important demand set by the International Monetary Fund in exchange for a $13bn loan over three years to overhaul the country’s economy.
Thursday’s much anticipated decision by the Egyptian Central Bank to devalue the pound followed a sharp and sudden decline this week in the value of the dollar in the unofficial market, dropping from an all-time high of 18.25 pounds to around 13 to the US currency.
The devaluation pegs the Egyptian pound at 13 to the dollar, up from nearly nine pounds on the official market. The IMF’s executive board has yet to ratify the $12bn loan provisionally agreed by Egypt and the IMF in August.
Egypt’s central bank increased interest rates by three percent to rebalance currency markets following weeks of turbulence. A shortage of dollars in the economy had put the currency under intense downward pressure in recent months. Read the full story here.