ALBAWABA — The Egyptian pound slipped to another record low on Wednesday as the country moved forward with needed monetary policies to try and prop up its beleaguered economy.
The currency’s drop of over 10 percent was the largest single fall since late October, trading at 31.95 pounds to the dollar before clawing back to around 27, according to the currency website Xe.
It has been trading at around 35 pounds to the dollar on the black market.
The devaluation, which represents a drop of around 50 percent against the dollar over the 10-month period from March, comes as Egypt committed to a flexible currency regime, a greater role for the private sector, and a range of monetary and fiscal reforms when it agreed to a $3 billion financial support package with the International Monetary Fund (IMF).
The IMF loan program, worth $3 billion over 46 months, is minuscule compared to Egypt's debt service which in 2022-2023 alone amounts to over $42 billion.
Egypt has only $34 billion in foreign currency reserves compared to $41 billion last February, while its foreign debt has more than tripled in the past decade to $157 billion.
After Russia's invasion of Ukraine last February, Egypt's economy was hit hard as wheat prices rose sharply, piling pressure one of the world's largest grain importer’s foreign currency reserves.
The latest government efforts to devalue the currency are an attempt to stamp out black market transactions in light of the growing foreign exchange crisis.
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