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Egypt Currency Near Record Low

Egypt Currency Near Record Low

Tuesday, 2 August, 2022 - 09:45
Egyptian pound plunge to a near all-time low against US dollar (Reuters)

The Egyptian pound plunged on Monday to a near all-time low of more than 19 to the dollar, in the world’s number one wheat importer where prices have soared.


Egypt’s currency has not fallen so sharply since December 2016, when it hit 19.3 to the US dollar after a drastic devaluation.


The central bank on Monday was buying one dollar for 19.01 pounds, compared with a rate of 15.6 in March. That amounts to a drop of about 22%.


Most of Egypt's wheat imports came from Russia and Ukraine but Moscow's invasion of Ukraine in February sent global prices soaring.


In late March, inflation-hit Egypt also devalued its currency, which lost around 18% of its value overnight.


Its net foreign reserves fell sharply to $37.082 billion in March from $40.994 billion in February, enough to cover five months of goods imports.


Saudi Arabia deposited $5 billion to help shore up central bank reserves at the end of March.


A first shipment of Ukrainian grain since the invasion left the port of Odessa on Monday under a landmark deal to lift Moscow’s naval blockade in the Black Sea.


With its food security under mounting pressure, Egypt in June said it would receive $500 million in financing from the World Bank.


Egypt has also requested a new loan from the International Monetary Fund. That will add to an already sizeable foreign debt equivalent to almost 90% of GDP.


On a visit to Cairo in June, European Commission chief Ursula von der Leyen also pledged “immediate relief of 100 million euros” to support food security in Egypt.


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