The Egyptian Central Bank has announced that it has devalued the Egyptian pound by 48 per cent in an apparent effort to meet the demands of International Monetary Fund before a $12 billion is secured.
The move meant the currency reached 13 pounds to the dollar, up from nearly nine. A central bank auction of dollars was to be held today to allow supply and demand to determine the value of the pound.
Currency devaluation is one of the conditions laid out by the IMF for a requested $12-billion loan to Egypt.
Following Egypt’s 2011 popular uprising, which ended the 30-year rule of autocratic President Hosni Mubarak, the pound tumbled to 5.8 to the dollar.
During the one-year rule of Mohamed Morsi, Egypt’s first democratically elected president, ousted in a 2013 military coup, the currency fell further to some seven pounds to the dollar.
Since then, the Egyptian pound has lost more than 100 per cent of its value due to an acute shortage of hard currency in the local market.
Experts attribute the shortage to a dramatic decline in tourism revenue, foreign investment and exports in recent years, due primarily to the country’s ongoing political turmoil.