Egyptian Central Bank devalues pound by 13%
The bank sold $198.1 million to local lenders at 8.85 pounds per dollar. The previous exchange rate was 7.73 pounds per dollar. However, according to sources, Central Bank officials weren’t immediately clear as to whether the lower EGP value was limited to Monday’s dollar sale or not.
In Egypt, foreign currency reserves have tumbled by more than 50% since 2011 although reserves have stabilized at just over $16 billion over the past six months.
Egypt heavily depends on imports and has been facing an acute foreign currency shortage. The Egyptian pound had come under intense downward pressure and it had weakened in recent weeks to almost 10 against the dollar on the black market. The Central Bank had resisted devaluation and the gap between the official rate and the black market rate was creating imbalances in the market.
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