Egyptian Pound Latest African Currency to Slump to Record Low Versus US Dollar – Economics Bitcoin News

The Egyptian pound lately turned the most recent foreign money from the African continent to see its worth versus the buck droop to a file low. The pound’s fall got here amidst reviews suggesting the Egyptian authorities is hoping to strike a mortgage cope with the International Monetary Fund (IMF) inside a month or two.

Egyptian Pound Still Overvalued

The Egyptian pound has turn out to be the most recent African foreign money to depreciate to a file low versus the U.S. greenback, after it slipped to an trade rate of 19.6736 for each buck on October 4. Before this, the foreign money’s earlier file low trade rate of 19.6725 per greenback was final seen in December 2016.

Other African currencies which have struggled in opposition to the united statesdollar in 2022 embrace the Nigerian foreign money, which lately touched a brand new all-time low of 735 naira for each greenback. In September, News reported that the hole between the Ethiopian birr’s official and parallel market trade rate had grown to a brand new file excessive. The Ghanaian cedi and the South African rand have additionally depreciated considerably in opposition to the U.S. greenback this year.

According to a Bloomberg report, the pound’s depreciation got here as Egypt is getting nearer to securing a mortgage from the International Monetary Fund (IMF). The IMF mortgage, in addition to the $22 billion that has been pledged by wealthy Gulf states, is anticipated to assist Egypt cope with the vitality and meals shocks stemming from the Ukraine-Russia army battle.

However, earlier than approving the mortgage the IMF will doubtless ask Egypt to regulate the trade rate simply because it did in 2016. At that point, the worldwide lender insisted the pound had to be devalued earlier than the Egyptian authorities might entry a $12 billion mortgage package deal.

A More Flexible Exchange Rate

In addition to demanding the pound’s devaluation, the IMF reportedly requested the Egyptian authorities take steps which ultimately made the North African nation a much less interesting funding vacation spot.

According to the report, the Egyptian authorities is probably going to accede to the IMF’s calls for for a extra versatile trade rate. Although no date of when the mortgage package deal is probably going to be authorised has been given, Egyptian finance Minister Mohamed Maait reportedly revealed in September that his authorities hoped to attain an settlement with the worldwide lender inside a month or two.

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Terence Zimwara

Terence Zimwara is a Zimbabwe award-winning journalist, writer and author. He has written extensively concerning the financial troubles of some African nations in addition to how digital currencies can present Africans with an escape route.

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