Following Sunday’s devaluation of the Egyptian pound by six percent to EP 4.15 to the dollar, IMF’s managing director, Horst Koehler, predicts the move will help boost economic growth in the country.
Koehler added that the change in the exchange rate, coupled with the significant depreciation over the past year, will make exports more attractive, increase competition and confidence, and consequently help revive the economy.
Private moneychangers, who are allowed to trade within a three percent fluctuation band, traded the dollar yesterday at a rate of EP 4.0 to the dollar. In the past, moneychangers bought dollars at higher rates than banks, though today the difference in rates is smaller. Up until the recent devaluation, the dollar was allowed to fluctuate up to 1.5 percent in either direction.
Egypt has been suffering a dollar liquidity crisis for the past two years, and in the past several months Egyptian banks even refused to sell dollars, or sold them at minimal quantities. — (MENA Report)
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