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Egypt’s Central Bank continues to devalue the pound

by ChemOrbis Editorial Team -
  • 07/07/2015 (17:55)
According to local media reports, The Central Bank of Egypt (CBE) continued to decrease the value of the Egyptian Pound (EGP) against the US dollar early this week. The bank devalued the EGP by another 10 piasters. Now, the Egyptian pound’s value is EGP7.73 for 1 USD at the Central Bank of Egypt and is at EGP7.83 for 1 USD at other banks operating in the country.

The CBE had lowered the value of the pound by another 10 piaster last Thursday as the bank is aiming to meet International Monetary Fund (IMF) requirements by devaluing the pound against dollar. The IMF believes that the Egyptian pound is overvalued against the dollar.

A reputable source in the banking sector commented, “The Egyptian government may want to reach an agreement with the IMF to obtain a loan for the Egyptian economy. Therefore, they had no option but to implement the IMF’s exchange rate requirements and pull the value of the Egyptian pound to a level which the IMF thinks is acceptable. However, the Central Bank is likely to lift interest rates on the Egyptian Pound soon as the increasing value of the dollar will result in higher inflation rates. If the Central Bank raises the Egyptian Pound’s interest rate, this situation is most likely to result in noteworthy hikes in commodity markets.”
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