![]() ![]() The EGP has also weakened against the euro (EUR) in the past year. It then rose, hitting 27.22 in the first few days of January. The rate continued to rise in smaller increments, ending the year at 24.75. The USD/EGP exchange rate breached the 19 mark at the beginning of August and climbed to 24.18 at the end of October. ![]() The value of the pound has continued to decline as the economic picture has deteriorated. It jumped to 18.54 on 22 March when the government devalued the currency in response to the war in Ukraine and rising inflation caused by higher commodity prices. The value of the Egyptian pound strengthened slightly against the US dollar following the 2016 devaluation that took the USD/EGP exchange rate from 7.83 at the start of the year to 18.60 by its end. EGP weakens in challenging economic environment That has driven up the cost of importing other dollar-denominated currencies such as oil, as well as wheat. Ukraine’s wheat exports were largely halted following Russia’s invasion, driving up prices on the international markets to record highs.Īs with other emerging market currencies, the Egyptian pound has come under pressure this year as the value of the US dollar has climbed on the back of rapidly rising US interest rates. Around 82% of its wheat imports over the past five years came from Russia and Ukraine, exacerbating the impact of the conflict between the two countries on its trade deficit and driving up inflation. The value of the Egyptian pound against other currencies’ value is driven by the country’s trade balance and net reserve.Įgypt relies heavily on grain imports, as the world’s largest importer of wheat. The Central Bank of Egypt initially allowed the pound to float freely in November 2016, resulting in a devaluation and has since controlled the exchange rate. The Egyptian pound is the official currency of Egypt. Will Egypt weaken its pound further? What has been driving the value of the currency lower? In this article we look at the currency’s recent performance and analysts’ latest EGP predictions. The Egyptian economy has come under pressure from budget cuts, the effects of the Covid-19 pandemic and the Russia-Ukraine conflict, and faces a shortage of foreign currency. It has shed more value in the opening days of 2023. In January, the IMF said “critical” structural reforms to which Cairo had agreed included “levelling the playing field between the public and private sector” as part of a state-ownership policy endorsed by President Abdel Fattah al-Sisi.Īs the Arab state grapples with a foreign currency crisis, a weakening pound and rising inflation, the government allowed the pound to fall 57.6% during 2022. On 10 January, the Egyptian government even committed to reducing the military's role in the economy as part of its IMF bailout package. In December, the Egyptian government reached a deal with the International Monetary Fund ( IMF) for a $3bn loan and agreed to move to a more flexible exchange rate regime. The Egyptian pound ( EGP) has fallen over 19% year-to-date (YTD) against the US dollar (USD). EGP sinks to record lows as IMF deal nears, further weakening likely Photo: RODWORKS / Shutterstock ![]()
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