The Egyptian pound continues to decline against the dollar

The Egyptian pound continued its decline against the dollar, on Wednesday, after the Central Bank of Egypt raised the interest rate and devalued the local currency by 14%.

Banks are selling the dollar for more than 18.5 pounds, while buying it at more than 18.45 pounds, which is an increase from the average of 15.6 pounds per dollar before the Central Bank's decision last Monday.

The central bank raised the key interest rate by 100 points to 9.75%.

The Central Bank’s decisions came to face inflationary pressures caused by the Corona virus pandemic and Russia’s war in Ukraine, which led to a rise in oil prices to record levels.

Economists say the Egyptian measures are likely signs that the government wants to secure another financing package from the International Monetary Fund.

Prime Minister Mostafa Madbouly said, on Tuesday, that the government is working to re-establish the 2022-2023 budget to prepare it for the most pessimistic scenarios.

The government has taken steps to control the price hike, including monitoring a relief package worth 130 billion pounds, which it said will increase the pensions and salaries of civil servants starting next April instead of July. It also established a new pricing system for unsubsidized bread, after bakeries raised prices to 50%.

Retailers who violate the government's pricing system will face a fine of up to five million Egyptian pounds ($286,200).

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