The value of the Egyptian pound is declining again against the dollar in Egypt after the Central Bank of Egypt adopted a looser exchange rate policy.
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The successive rises in the price of the dollar on the Egyptian foreign exchange market triggered an unprecedented wave of inflation
Today, Wednesday, the US dollar recorded its all-time high in the Egyptian foreign exchange market, breaking above 30 Egyptian pounds to the dollar.
With the price of the dollar rising to above 30 Egyptian pounds, the pound has lost about half its value since last March, when the Central Bank of Egypt announced a more flexible policy in the foreign exchange market, while the rate of Dollar exchange rate at that time was less than 16 Egyptian pounds.
Last March, Egypt’s central bank announced a more flexible exchange rate policy against the backdrop of a sharp decline in Egypt’s foreign exchange reserves, which fell from over $40 billion to below $34 billion.
The jump in the dollar today, from around £27 to over £30 per dollar, is the third in less than a year.
Before the end of last October, and before concluding an agreement with the International Monetary Fund, according to which Egypt would obtain a loan of 3 billion dollars, the bank once again lowered the pound exchange rate, bringing the price of the dollar at less than 24 pounds, after which it recorded subsequent partial increases that took it yesterday to over 27 pounds.
And yesterday, Tuesday, the International Monetary Fund held a press conference announcing the terms of the agreement concluded with Egypt, which provided for Egypt’s commitment to a complete liberalization of the exchange rate, so the dollar recovered to exceed the 30 pounds.
Subsequent increases in the price of the dollar in the Egyptian foreign exchange market led to an unprecedented surge in inflation, as inflation rates soared to their highest levels in five years.
Core inflation, according to data from the Central Bank of Egypt announced yesterday Tuesday, exceeded the level of 24%, while headline inflation reached 21.9%, according to the bulletin of the Central Agency for Public Mobilization and yesterday’s stats.
