Egypt announced on Wednesday, December 12 its third devaluation of the pound in less than a year, gripped by economic slowdown and a liquidity crisis that has deteriorated since the September 11 attacks in the United States.
A central bank source told AFP the new rate would be 4.5 Egyptian pounds to the dollar, a devaluation of 8.4 percent, although Prime Minister Atef Ebeid said it would be announced officially on Thursday, the official MENA news agency reported.
The currency has now been devalued by 23 percent against the dollar since January, the last time in August when it was set at 4.15 to the dollar from 3.19. The official rate Wednesday was 4.27, although on the black market the dollar was buying 4.8 pounds.
The pressure on Egypt's foreign currency reserves has become more acute since the September 11 attacks, expected to have a serious impact on Egypt's major sources of hard currency such as tourism and Suez Canal revenues. Earlier this month a top official forecast a drop in foreign currency revenues of $2.4 billion as a result of the attacks.
Despite a decade of economic reforms aimed at producing an export-driven economy, Egypt ran up a trade deficit of $9.35 billion in fiscal year 2000-2001, according to the central bank. — (AFP, Cairo)
© Agence France Presse 2001
© 2001 Mena Report (www.menareport.com)
