The Egyptian pound fell 10.67% on Monday, following weeks of pressure on the currency as foreigners withdrew billions of dollars from Egypt’s treasury markets in the aftermath of Russia’s invasion of Ukraine.
According to Refinitiv statistics, the pound fell to 17.42-17.52 against the dollar, after trading at approximately 15.7 pounds to the dollar since November 2020.
In a surprise monetary policy meeting earlier on Monday, the country’s central bank raised overnight interest rates by 100 basis points.
Egypt has been in talks with the International Monetary Fund about possible assistance, according to sources close to the negotiations, although no formal request has been made.
Importers were unable to get the dollars required for letters of credit, causing products to be stranded in Egyptian ports.
Egypt is experiencing greater prices for its significant wheat import demands, as well as a loss in tourism earnings from Russian and Ukrainian visitors to Red Sea resorts, as a result of the conflict in Ukraine.
Egypt’s biggest wheat suppliers are Russia and Ukraine.
According to a statement from Prime Minister Moustafa Madbouly’s office, Egypt fixed the price of unsubsidized bread at 11.5 Egyptian pounds ($0.66) per kilogram on Monday.
On Monday, the state-owned Banque Misr announced the availability of 18 per cent-yielding certificates of deposit.
Since Russian forces entered Ukraine, foreign investors have pulled billions of dollars from Egypt’s money market.