The Egyptian pound has fallen to a historic low

The Egyptian currency has fallen to a historic low. The exchange rate of the US dollar against the Egyptian pound rose today to the level of 32.195, adding 16.3%. Over the past 12 months, Egypt's national currency has depreciated by more than 76%.

The weakening of the pound began after the International Monetary Fund yesterday outlined the details of a $3 billion aid package to the country. Egypt has committed itself to introduce a flexible exchange rate, strengthen the role of the private sector in the country's economy, and carry out a number of monetary and fiscal reforms. 

In addition, among its obligations is to reduce investments in state and national projects in order to reduce inflation and reduce foreign currency spending.

Recall that Egypt faced a shortage of foreign currency, despite the sharp depreciation of the Egyptian pound last year. A year ago, the currency was trading in a narrow range below 16 Egyptian pounds per dollar. However, in March and October 2022, the Central Bank of Egypt allowed the pound to depreciate sharply. On October 27, the Egyptian pound fell by 15% after the announcement of a new financing package from the International Monetary Fund. Then the regulator announced that it was moving to a more flexible currency regime.