The US Embassy in Cairo has warned its citizens of possible protests in Egypt due to the significant depreciation of the local currency (the pound), and advised them to be careful and avoid areas that may witness demonstrations.
In a statement on its official website yesterday, Friday, the US embassy announced that Egypt witnessed "during the past 24 hours, a significant decline in the value of the (Egyptian) currency has affected its economy and population."
The pound witnessed a sharp decline against the dollar, amounting to 14.5%, after it was announced Thursday that Cairo and the International Monetary Fund had reached a financing agreement worth $3 billion over 4 years.
The authorities committed to permanently switching to a “flexible exchange rate system,” and the Central Bank raised interest rates by 200 basis points in an exceptional meeting, which raised questions about the implications for monetary policy and macroeconomics in Egypt.
Egypt has held talks with the IMF to obtain a new loan since last March, after its economic problems worsened due to the repercussions of the war in Ukraine.
This fund has long urged Cairo to allow greater flexibility in the exchange rate.