Skip to main content

Egypt's currency plunges almost 17% against greenback

The Egyptian pound has plunged almost 17 percent against the US dollar on Monday as the economy worsens in the Arab world's most populous nation
— Cairo (AFP)

The Egyptian pound plunged nearly 17 percent in value against the US dollar on Monday, following a rise in inflation and amid mounting economic hardships.

The local currency in the Arab world's most populous country already saw a sharp devaluation in 2016 when it lost nearly half its value against the dollar overnight.

The pound was floated at the time as part of a package of reforms in exchange for a $12-billion bailout from the International Monetary Fund.

The pound was trading at 18.20 to the dollar by closing time at banks on Monday, from 15.70 the previous day, according to the central bank.

The finance ministry announced it will maintain the customs exchange rate at 16 pounds to the dollar, as the local currency continued its freefall.

The ministry also announced a package of measures worth about $7 billion to shield society's most vulnerable against shocks in the market.

The latest depreciation comes as global food supply chains have been dealt a major blow by Russia's invasion of Ukraine.

As the world's largest importer of wheat, Egypt relies on both countries for 85 percent of its supplies of the staple, as well as 73 percent of its sunflower oil, for which Ukraine is world leader.

In remarks Monday, central bank governor Tarek Amer said the depreciation came to "safeguard foreign exchange liquidity and the confidence of foreign investors".

The decision had been "coordinated with our international partners, upon whom we depend to finance many of our needs", he added in a televised news conference.

- Rising inflation -

Investment bank JP Morgan recently estimated the Egyptian pound to be overvalued by about 15 percent.

Inflation in the North African country stood at 10 percent in February, according to the country's statistics agency, reaching an almost three-year high and driven by a 20-percent increase in food prices.

The World Bank has warned that a 30-percent rise in food prices could result in a 12-percent increase in poverty rates, already hovering at about a third of Egypt's 103 million-strong population.

Rising prices have prompted authorities to impose a tariff on unsubsidised bread for the first time.

The central bank on Monday announced a rise in key interest rates of one percentage point at an emergency meeting, in a bid to tackle inflation.

The overnight deposit rate increased to 9.25 percent and the overnight lending rate to 10.25 percent, while the main operation rate was set at 9.75 percent.

Egypt is bogged down by a sizeable foreign debt bill that constitutes almost 90 percent of GDP.

Egypt has embarked on fiscal reforms and sought to overhaul the taxation regime, but it has struggled to control the informal sector, which constitutes a large portion of the economy.

Join hundreds of Middle East professionals with Al-Monitor PRO.

Business and policy professionals use PRO to monitor the regional economy and improve their reports, memos and presentations. Try it for free and cancel anytime.

Already a Member? Sign in


The Middle East's Best Newsletters

Join over 50,000 readers who access our journalists dedicated newsletters, covering the top political, security, business and tech issues across the region each week.
Delivered straight to your inbox.


What's included:
Our Expertise

Free newsletters available:

  • The Takeaway & Week in Review
  • Middle East Minute (AM)
  • Daily Briefing (PM)
  • Business & Tech Briefing
  • Security Briefing
  • Gulf Briefing
  • Israel Briefing
  • Palestine Briefing
  • Turkey Briefing
  • Iraq Briefing

Premium Membership

Join the Middle East's most notable experts for premium memos, trend reports, live video Q&A, and intimate in-person events, each detailing exclusive insights on business and geopolitical trends shaping the region.

$25.00 / month
billed annually

Become Member Start with 1-week free trial
What's included:
Our Expertise AI-driven

Memos - premium analytical writing: actionable insights on markets and geopolitics.

Live Video Q&A - Hear from our top journalists and regional experts.

Special Events - Intimate in-person events with business & political VIPs.

Trend Reports - Deep dive analysis on market updates.

Text Alerts - Be the first to get breaking news, exclusives, and PRO content.

All premium Industry Newsletters - Monitor the Middle East's most important industries. Prioritize your target industries for weekly review:

  • Capital Markets & Private Equity
  • Venture Capital & Startups
  • Green Energy
  • Supply Chain
  • Sustainable Development
  • Leading Edge Technology
  • Oil & Gas
  • Real Estate & Construction
  • Banking

We also offer team plans. Please send an email to and we'll onboard your team.

Already a Member? Sign in

Start your PRO membership today.

Join the Middle East's top business and policy professionals to access exclusive PRO insights today.

Join Al-Monitor PRO Start with 1-week free trial