The Egyptian pound declines to more than 50 against the dollar Economy

The Egyptian pound fell sharply against the dollar with the opening of the markets, with the exchange rate exceeding 50 pounds to the dollar from the level of 30.85 to the dollar that Egypt had tried for months to defend, according to what Reuters said.

This step represents a long-awaited devaluation of the currency, because applying a more flexible exchange rate is one of the main demands of the International Monetary Fund.

This comes after the Monetary Policy Committee of the Central Bank of Egypt decided – during its extraordinary meeting today – to raise overnight deposit and lending returns and the central bank’s main operation rate by 600 basis points, to 27.25%, 28.25%, and 27.75%, respectively.

The Egyptian pound... from the top of the currencies to its bottom. Source: Al Jazeera Documentary
The Central Bank of Egypt said that unifying the exchange rate is a very important measure (Al Jazeera)

The bank said in a statement that the committee decided to accelerate the monetary restriction process in order to accelerate inflation’s downward path and ensure a decline in its monthly rates.

He added, “The Central Bank affirmed its commitment to maintaining price stability in the medium term, as part of its keenness to fulfill the role assigned to it to protect the requirements of sustainable development. To achieve this, the Central Bank is committed to continuing its efforts to shift towards a flexible framework for targeting inflation, by continuing to target inflation as a basis for policy.” cash while allowing the exchange rate to be determined according to market mechanisms.”

He continued, “Unifying the exchange rate is a very important measure, as it contributes to eliminating the accumulation of demand for foreign exchange following the closing of the gap between the official and parallel market exchange rates.”

From 10 months ago until the end of yesterday’s session, Tuesday, the exchange rate of the dollar reached 31 pounds, while it moved in the parallel market (black market) to reach 70 pounds about 3 weeks ago, before it currently reached 48 pounds. In February 2022, the official price of the dollar was In Egypt, it was 15.7 pounds, while after the three moving operations it reached 31 pounds.

Meanwhile, bonds jumped Egypt International bonds more than two years after the central bank raised interest rates, as Tradeweb data showed that longer-term bonds achieved the largest gains, as bonds due in 2047 recorded an increase of 2.6 cents, reaching 82.3 cents, according to Reuters.

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