#Other countries : The Egyptian pound was trading at 18.2 to the dollar on Monday, losing nearly 17% of its value in one day, as inflation in the country, the top importer of Russian and Ukrainian wheat, is at its highest since three years.
Faced with inflation that reached 10% over one year in February, the Central Bank met urgently on Sunday evening and raised interest rates by one point. The deposit rate thus rose to 9.25% and that on loans to 10.25%.
Inflation is driven by food prices up 20.1%, according to official figures.
The World Bank had already warned that a 30% rise in food prices might push up the poverty rate by 12%, which already affects almost a third of the 103 million Egyptians.
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While the pound continued to fall over the hours on Monday, the Ministry of Finance announced in the followingnoon a provisional customs exchange rate fixed at 16 pounds for one dollar, as well as seven billion dollars of measures support for the poorest.
During a press conference broadcast on Monday by state television, the Governor of the Central Bank of Egypt, Tarek Amer, explained that the decisions of his institution aim to «preserve foreign exchange liquidity and foreign investor confidence, so a correction in the exchange rate should reflect international developments».
He held that the decisions were «consistent with our international partners that we need to fund many of our needs».
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Recently, JP Morgan bank had anticipated a devaluation in the most populous of Arab countries, which had already devalued its currency by almost 50% in 2016 as part of an austerity plan decreed in exchange for a loan of 10 .8 billion euros from the International Monetary Fund (IMF).
Egypt, which imports 85% of its wheat and 73% of its sunflower oil from Ukraine and Russia, is bearing the brunt of the unprecedented spike in grain and oil prices resulting from Moscow’s invasion of its neighbor .
For the first time, Cairo has decided to regulate the price of unsubsidized bread, ten days before Ramadan, a period synonymous with food expenditure for households.
The country’s budget of approximately 160 billion dollars is weighed down by a public debt which reaches 90% of the GDP.
Cairo has embarked on an overhaul of its taxation but is struggling to control the informal sector, which, according to researchers, represents more than a third of its economic activity.
