Cash-strapped Egypt allows its currency to fall sharply against dollar, hikes interest rates

By SAMY MAGDY
Associated Press

CAIRO (AP) — The Egyptian pound has slipped sharply against the dollar after Egypt’s central bank raised its main interest rate and said it would allow the currency’s exchange rate to be set by market forces. Commercial banks were trading the U.S. currency at more than 47 pounds by midday Wednesday, up from about 31 pounds per dollar. The measures are meant to combat inflationary waves and attract foreign investment as the country experiences a staggering shortage of foreign currency. The economy has been hit hard by years of government austerity, the coronavirus pandemic, the fallout from the war in Ukraine, and most recently, the Israel-Hamas war in Gaza.