CAIRO (AP) – The Egyptian pound was trading Sunday in banks at around 16 to the dollar, down from the 13-pound peg the Central Bank set as a guiding exchange rate when it floated the currency last week in an unprecedented move.
Banks were selling the U.S. currency at 16 pounds while buying it at around 15.5 pounds on the first full business day in Egypt since the Central Bank floated the currency on Thursday. The dollar was trading in banks at 8.8 pounds prior to the floatation. Earlier last week, it reached an all-time high of more than 18 pounds on the parallel black market.
The floatation was followed just hours later with a steep hike in the price of fuel. The two measures met key demands set by the International Monetary Fund in exchange for a $12 billion dollar loan over three years to overhaul Egypt’s ailing economy.
The IMF’s executive board has yet to ratify the loan, which is likely to happen before the end of the year.
The floatation and the hike in fuel prices are part of a package of unpopular measures taken by President Abdel-Fattah el-Sissi’s government to revive the country’s declining economy, including the introduction of a 13-percent value added tax, higher sugar prices for ration card holders and a rise in the price of household electricity.