EGYPT: Government Devalues Currency by Nearly 14%

Egyptian government has devalued the Egyptian pound by nearly 14%. The 21 March 2022 move follows foreign investors withdrawing billions of US dollars from Egyptian treasury markets, largely in response to fears around the impact of events in Ukraine. The Central Bank of Egypt (CBE) adjusted the official exchange rate to EGP18.27 per US dollar, from EGP15.7 which had been the set trading rate since November 2020. The devaluation was not unexpected, the International Monetary Fund (IMF) having recommended the move. 

The pound’s depreciation has come at a time when many food supply chains around the world have been hit hard by the hostilities in Ukraine. Egypt is the world’s biggest importer of wheat, relying on Russia and Ukraine for about 85% of wheat supplies and 73% of sunflower oil. Egypt has also suffered losses in tourism revenue at resorts in the Red Sea region, popular with both Russian and Ukrainian visitors.