Egypt’s pound hits new lows after shift to more flexible forex regime

Egypt’s pound hits new lows after shift to more flexible forex regime

CAIRO - Egypt's pound weakened by more than 13% to a new low below 32 to the U.S. dollar on Wednesday as the central bank moved to a more flexible exchange rate under the terms of an International Monetary Fund financial support package.

The pound's decline prompted speculation as to how far the currency might eventually fall, with some analysts hoping at least some foreign investors may return to the Egyptian market and Egyptians working abroad begin sending more of their savings home.

Egypt turned to the IMF for assistance after Russia's war in Ukraine pushed up its bills for wheat and oil while dealing a blow to tourism from two of its largest markets, Ukraine and Russia, a key source of hard currency.

The pound dropped as low as 32.14 to the dollar from about 27.60 at the opening of trade on Wednesday, Refinitiv data showed. The currency has fallen by a cumulative 51% against the dollar since March, with sharp drops on single days followed by more fluid movement since last week.

It later rebounded to about 29.60 to the dollar.

Egypt said it would shift to a "durably flexible" exchange rate when it reached an agreement with the IMF for a $3