{"id":16497,"date":"2023-01-16T07:17:40","date_gmt":"2023-01-16T07:17:40","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/egyptian-pound-reaches-new-low-against-us-dollar-despite-flexible-exchange-rate-regime-africa-bitcoin-news\/"},"modified":"2023-01-16T07:17:40","modified_gmt":"2023-01-16T07:17:40","slug":"egyptian-pound-reaches-new-low-against-us-dollar-despite-flexible-exchange-rate-regime-africa-bitcoin-news","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/egyptian-pound-reaches-new-low-against-us-dollar-despite-flexible-exchange-rate-regime-africa-bitcoin-news\/","title":{"rendered":"Egyptian Pound Reaches New Low Against US Dollar Despite Flexible Exchange Rate Regime \u2013 Africa Bitcoin News"},"content":{"rendered":"

(Originally posted on : Bitcoin News )<\/b>
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The exchange rate of the Egyptian pound versus the U.S. dollar fell to a new low on Jan. 11 after it tapped 32.14 per greenback. The currency\u2019s latest significant depreciation came just a few months after it adopted a flexible exchange rate regime. According to the International Monetary Fund, the monetary authorities in Egypt have pledged not to intervene in currency markets. <\/strong><\/p>\n

Flexible Exchange Rate Regime<\/h2>\n

Just a few months after plunging by more than 15% versus the U.S. dollar, the Egyptian pound<\/a> tapped a new low of more than 32 units per greenback on Jan. 11. According to a Reuters report, the pound\u2019s latest depreciation has prompted some analysts to question the extent to which the central bank wants the pound to fall.<\/p>\n

\"Report:
EGP\/USD on Jan. 15, 2023.<\/figcaption><\/figure>\n

As reported<\/a> by Bitcoin.com News in October 2022, the pound\u2019s official exchange rate versus the dollar fell from just under 20 units per dollar to 23.09 per dollar after Egyptian monetary authorities agreed to abandon the fixed exchange rate regime. In return, Cairo would receive a $3 billion financial package from the International Monetary Fund (IMF).<\/p>\n

Following the currency\u2019s latest fall, some Egyptian analysts quoted in the Reuters report<\/a> believed the pound had reached its lower limit. Others like Farouk Soussa of Goldman Sachs said it is still difficult to conclude that the pound versus the dollar exchange rate had reached an equilibrium.<\/p>\n

\u201cWhen portfolio investors start to come back in, that is when the market will have judged equilibrium. But there is no direct way of observing equilibrium,\u201d Soussa reportedly said.<\/p>\n

Monica Malik, an economist at the Abu Dhabi Commercial Bank said the pound\u2019s latest plunge alone does not guarantee that investors will return. The economist said clearing the foreign exchange backlog may be one step that reassures investors. However, this requires new USD liquidity and according to Malik \u201cthere is currently no visibility where this liquidity will come from.\u201d<\/p>\n

Meanwhile, in the IMF\u2019s Egypt staff country report<\/a>, the global lender revealed that the government in Cairo had promised not to intervene in currency markets. As per its agreement with the global lending institution, Egyptian monetary authorities would only intervene in cases of excessive volatility.<\/p>\n

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\nTags in this story
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Abu Dhabi Commercial Bank<\/a>, Analysts<\/a>, depreciation<\/a>, Dollar<\/a>, Egypt<\/a>, egyptian pound<\/a>, Exchange rate<\/a>, Farouk Soussa<\/a>, Flexible exchange rate<\/a>, IMF<\/a>, International Monetary Fund<\/a>, Investors<\/a>, Monica Malik<\/a>, pound<\/a>, regime<\/a>, US Dollar<\/a><\/div>\n<\/div>\n

What are your thoughts on this story? Let us know what you think in the comments section below. <\/strong><\/em><\/p>\n

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\nTerence Zimwara <\/h6>\n

\nTerence Zimwara is a Zimbabwe award-winning journalist, author and writer. He has written extensively about the economic troubles of some African countries as well as how digital currencies can provide Africans with an escape route.

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Image Credits<\/b>: Shutterstock, Pixabay, Wiki Commons<\/em><\/p>\n

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