The dramatic slide of Egypt's currency continues

Egypt's pound reached a new low of about 30 pounds to the US Dollar on Wednesday (Jan. 11) as the central bank moved to a more flexible exchange rate under the terms of an IMF financial support package.

The IMF Mission Chief for Egypt reaffirmed the fund’s resolve to back Cairo’s economic reforms and efforts to tame inflation.

Ivanna Vladkova Hollar spoke during a news conference in Washington, DC (USA). 

"Exchange rate and monetary policies will be focused on a permanent shift to a flexible exchange rate regime that would help absorb external shocks and rebuild reserves while gradually reducing inflation," she insisted. 

"Continued fiscal discipline and fiscal structural policies aim to maintain market confidence and ensure the downward trajectory of the debt to GDP ratio, while strengthening the budgetary process, increasing transparency and improving the budget composition so as to allow for an expansion in social spending."

In December, the International Monetary Fund approved a $3 billion loan for Egypt in exchange for a number of economic reforms.

The 46-month loan package allows for a further $14 billion in possible financing for Egypt. 

Most of Egypt’s more than 104 million population has suffered from price hikes. The country’s statistics bureau said Tuesday, that Egypt continued to battle surging inflation amid a dramatic slide of its currency.

The state-run Central Agency for Mobilization and Statistics unveiled figures showing that the annual inflation ballooned at 21.9% last month.

The higher inflation has inflicted heavy burdens on consumers, especially lower-income households. Nearly 30% of Egyptians live in poverty, according to official figures.

The economy was also hit hard by the coronavirus pandemic, and the fallout from the war in Ukraine. Egypt is the world’s largest wheat importer, with most of its imports having traditionally come from eastern Europe.