Egyptian Pound depreciates further following recent devaluation announcement
On Thursday, Egypt’s currency saw a 2 percent dip against the US dollar, as reported by bankers. Trading seemed sparse, with a strong demand for dollars in the wake of the pound’s third effective devaluation in under a year.
According to data from Refinitiv, the pound experienced a drop to 27.1 per dollar, showing more volatility than usual. Meanwhile, on Thursday, street black market dealers were seen offering 30 pounds in exchange for a dollar.
The pound took a significant tumble on Wednesday, plummeting by approximately 6.8 percent in its most substantial single-day decline since October, the last time it experienced such a sharp drop.
Currency flexibility has been a key demand of the International Monetary Fund, which agreed a 46-month, $3 billion financial package for Egypt late last year.
A year ago the pound traded in a tight range below 16 per dollar. After the central bank allowed the pound to depreciate sharply in March and October last year, it soon resumed trading within a tight band, moving only about 0.1 EGP per dollar.
Despite the devaluations a shortage of foreign currency has continued to hamper imports in recent months.
Authorities announced last week they had phased out restrictions on accessing dollars for imports that had been in place since February.
Two bankers said trade in the pound was thin and demand for dollars remained high on Thursday as banks struggle to clear a huge backlog of orders.
The demand for dollars includes a mix of imports both already on their way and others newly ordered, one of the bankers said.
(Reuters)
