Egyptians are forced to confront the harsh reality of a free-floating currency, which will hike the cost of basic goods Egypt’s currency has nosedived since its central bank free floated the pound this month. It lost more than 50% of its value, adding to the burden already felt by Egyptian consumers.The pound was trading at around LE15.50 against the US dollar earlier this week, down from an official rate of LE8.88 earlier this month. The devaluation paves the way for a US$12bn loan from the International Monetary Fund ($2.75m is already on its way).Early in 2016, Central Bank governor Tarek Amer implemented the biggest devaluation in years, cutting the pound rate by 13%. Even at this level, however, it was far from resembling an accurate market rate, leading the parallel market to thrive.Last week’s decision to devalue the currency was not a standalone measure. It was accompanied by a sudden cut in fuel subsidies that raised the price of petrol and diesel by more than 45% overnight...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.