Egypt’s central bank announced that it would allow the national currency to trade freely. The regulator reported its crucial move November 3.
The central bank had to make such a decision to prop up the ailing economy and combat the black market for US dollars. Policy makers set an exchange rate of 13 Egyptian pounds per US dollar, allowing for a range of plus or minus 10%.
Among other rescue measures, the central bank raised interest rates by three percentage points. From now on, the short-term deposit rate, overnight interest rate, and refinancing rate are 14.75%, 15.75%, and 15.25% respectively.
Experts think the introduction of the flexible exchange rate will encourage the IMF to approve the bailout loan worth $12 billion.