The Egyptian pound on Wednesday suffered its biggest one-day slide against the US dollar, signalling Cairo's intention to meet a key International Monetary Fund demand for a flexible foreign exchange mechanism, resulting in a further increase in inflationary pressures on the nation's ailing economy.
"It kept falling all day. It fell as many as six or seven times," said a cashier at the branch of a major private bank in Cairo. "I have to constantly monitor the rate as I serve customers' foreign currency dealings.
"Prices will shoot up again," he said.
The Egyptian pound was trading at about 26.60 to the US dollar late afternoon on Wednesday, up from about 24.60 at the close of business the previous day. It registered 24.70 at the opening of business today.
Egypt has devalued its currency three times since March. In a late October devaluation, the pound lost 14.5 per cent of its value. In the latest round, the currency headed a slide of as much as 6.6 per cent.
Currency flexibility is a key demand by the IMF, which last month gave the final go-ahead for a 46-month, $3 billion financial rescue package agreed in October. Another key demand is for the state to withdraw from a range of economic activities to allow the private sector a bigger role.
Egypt has been badly hit by the fall-out from the Russia-Ukraine war, which has worsened a foreign currency shortage that in turn led to a sharp decline in imports and a backlog of imported goods at ports.
"Whether this resolves the FX liquidity issues that Egypt has been facing will depend on whether we see significant FX inflows in the near term," Farouk Soussa of Goldman Sachs told Reuters.
"Key is to unify the exchange rate, which will require eliminating the FX backlog and ensuring demand for FX is met going forward," he said.
Separately on Wednesday, Egypt's two main state banks, Banque Misr and National Bank of Egypt, said in that they were offering one-year savings certificates with a return of 25 per cent. Similar returns in the past had never exceeded 20 per cent.
However, black market currency dealers in Cairo appeared oblivious to Wednesday's rise in the value of the dollar to the pound, and continued to buy the dollar for 29 pounds.
Egypt is suffering from double-digit inflation that reached more than 18 per cent in November. Its foreign currency crunch has hit a wide spectrum of industries dependent on imported materials and forced authorities to limit the withdrawal of foreign currency.
The foreign currency shortage was made worse in the weeks immediately after the outbreak of the Russia-Ukraine war, when investors in Egypt's lucrative debt market pulled out $20 billion.
Meanwhile, Prime Minister Mostafa Madbouly said on Wednesday that his government's efforts to clear the backlog of imported goods stranded at ports across the country were continuing and that it has managed to free $6.8 billion worth of goods since the start of December.
A cabinet statement quoted him as saying that his government was stepping up efforts to check the steep rise in food prices, promising again to deal decisively with "greedy merchants".
A minister in charge of food supplies told the parliament on Tuesday that the government had no intention to set food prices, dismissing the idea as meaningless and a relic of Egypt's socialist era in the 1960s.
Sholto Byrnes on Myanmar politics
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
Mohammed bin Zayed Majlis
How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
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UAE currency: the story behind the money in your pockets
Killing of Qassem Suleimani
Killing of Qassem Suleimani
UAE currency: the story behind the money in your pockets
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
Defined benefit and defined contribution schemes explained
Defined Benefit Plan (DB)
A defined benefit plan is where the benefit is defined by a formula, typically length of service to and salary at date of leaving.
Defined Contribution Plan (DC)
A defined contribution plan is where the benefit depends on the amount of money put into the plan for an employee, and how much investment return is earned on those contributions.
UAE currency: the story behind the money in your pockets
more from Janine di Giovanni
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
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If you go
The flights
There are direct flights from Dubai to Sofia with FlyDubai (www.flydubai.com) and Wizz Air (www.wizzair.com), from Dh1,164 and Dh822 return including taxes, respectively.
The trip
Plovdiv is 150km from Sofia, with an hourly bus service taking around 2 hours and costing $16 (Dh58). The Rhodopes can be reached from Sofia in between 2-4hours.
The trip was organised by Bulguides (www.bulguides.com), which organises guided trips throughout Bulgaria. Guiding, accommodation, food and transfers from Plovdiv to the mountains and back costs around 170 USD for a four-day, three-night trip.
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The specs
Engine: 2.3-litre, turbo four-cylinder
Transmission: 10-speed auto
Power: 300hp
Torque: 420Nm
Price: Dh189,900
On sale: now
How to donate
Text the following numbers:
2289 - Dh10
6025 - Dh 20
2252 - Dh 50
2208 - Dh 100
6020 - Dh 200
*numbers work for both Etisalat and du
Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
Torque: 480Nm, 670Nm, 870Nm
On sale: Later in 2025 or early 2026, depending on region
Price: Exact regional pricing TBA
