Egyptian currency plunges to unprecedented low

The Egyptian pound has hit an unprecedented low of 6.6 percent since the currency's devaluation in October last year, APA…

The Egyptian pound has hit an unprecedented low of 6.6 percent since the currency’s devaluation in October last year, APA can report on Wednesday.The new drop was recorded on Wednesday as Egypt scramble for solutions to deal with the worst foreign-exchange crisis since 2018. 

The currency slump reached over 26.5 per dollar in the offshore market although the value of the pound appears stronger than what obtains in the alternative black market. 

There have been frantic moves by Egypt’s largest banks to offset this overstretched inflation by introducing one-year certificates of deposit pegged at 25 percent in interest rate.

This was done to encourage a saturation of the dollars and arrest the pound’s free fall.

Officials say the loss in value of the Egyptian currency stems from rate inconsistencies in official and parallel markets, which has adversely affected liquidity in foreign exchange.

The international Monetary Fund late last year intervened with a $3 billion loan to help cushion Egypt’s currency devaluation as part its flexible foreign exchange policy. 

Egypt’s economy has been struggling in the aftermath of the coronavirus pandemic exacerbated by the consequences of Russia’s war with Ukraine.

The country is a net exporter of wheat importers from those countries.

The currency slumped by 15 percent in early October last year and dropped a further 4.4 percent by the end of that same month.

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