CAIRO: Egypt’s central bank floated the pound currency on Thursday, devaluing by 32.3 percent to an initial guidance level of 13 pounds to the US dollar in a move to rebalance currency markets after weeks of turbulence.
The Egyptian pound had been pegged at 8.8 to the dollar since March, but a shortage of dollars in the economy had put the currency under intense downward pressure in recent months.
Egypt has struggled to earn dollars since a 2011 uprising drove away tourists and foreign investors — the country’s main sources of foreign currency.
The central bank has been rationing dollars and imposing strict capital controls whilst maintaining the pound at an artificially strong official rate hampering trade in a country that relies on imports of everything from cars to food.
A rapid slide on the black market to 18 earlier this week prompted importers to cease buying greenbacks. The rate then strengthened to 13 per dollar by late on Wednesday, creating a rare opportunity for the central bank to devalue.
In a surprise announcement early on Thursday, the central bank said it had gone further than bankers expected, to freely float the Egyptian pound. It simultaneously hiked benchmark interest rates by 300 basis points to buoy the currency.
“The Central Bank of Egypt hereby announces its decision to move, with immediate effect, to a liberalized exchange rate regime in order to quell any distortions in the domestic foreign currency market,” it said in a statement.
“This move will allow market demand and supply dynamics to work effectively in order to create an environment of reliable and sustainable provision of foreign currency.”
With a budget deficit of 12 percent in the 2015-16 fiscal year and currency markets facing severe distortions, Egypt reached a preliminary deal with the International Monetary Fund in August for a $12 billion three-year loan to support an economic reform program.
As part of those reforms, Egypt was widely expected to devalue the pound and ditch its currency peg to the dollar for a more flexible exchange rate mechanism, a move economists say could unlock billions of dollars in foreign investment.
“There will be relief in the market and with companies that the devaluation has happened,” said Angus Blair, chief operating officer of Pharos Holding, a Cairo-based financial services company.
“The resetting of Egypt’s economic equation has begun at last, but much more needs to be done by the government to reform the economy.”
Bankers told Reuters they had been informed that the central bank would set an initial guidance rate of 13 pounds per dollar and that banks would initially be allowed to trade within a 10 percent band above or below the new rate until an exceptional foreign exchange sale at 1.00 p.m. (1100 GMT).
After the results of the auction are announced the band will be removed, according to a central bank memo that was sent to banks earlier on Thursday and seen by Reuters.
The central bank will offer $4 billion at the exceptional auction, bankers said, for which banks can bid and offer freely. The central bank said the new rate was non-binding and would serve as “soft guidance to jumpstart the market.”
“Banks and other market participants are at liberty to quote and trade at any exchange rate. Bid and ask exchange rates will be determined by forces of demand and supply,” it said.
“The CBE will use the prevailing market rate for any transactions it undertakes.”
Egypt’s dollar bonds rallied 2 percent across the curve after the flotation. Egypt’s stock index surged 8.3 percent on the news with many stocks rising to their 10 percent daily limits.
The central bank also said in a statement that it would abolish the priority list for imports and that banks would be allowed to operate until 9 p.m. every day, including weekends, for foreign exchange transactions and transfers only.
Egyptian central bank floats pound
Egyptian central bank floats pound
First EU–Saudi roundtable on critical raw materials reflects shared policy commitment
RIYADH: The EU–Saudi Arabia Business and Investment Dialogue on Advancing Critical Raw Materials Value Chains, held in Riyadh as part of the Future Minerals Forum, brought together senior policymakers, industry leaders, and investors to advance strategic cooperation across critical raw materials value chains.
Organized under a Team Europe approach by the EU–GCC Cooperation on Green Transition Project, in coordination with the EU Delegation to Saudi Arabia, the European Chamber of Commerce in the Kingdom and in close cooperation with FMF, the dialogue provided a high-level platform to explore European actions under the EU Critical Raw Materials Act and ResourceEU alongside the Kingdom’s aspirations for minerals, industrial, and investment priorities.
This is in line with Saudi Vision 2030 and broader regional ambitions across the GCC, MENA, and Africa.
ResourceEU is the EU’s new strategic action plan, launched in late 2025, to secure a reliable supply of critical raw materials like lithium, rare earths, and cobalt, reducing dependency on single suppliers, such as China, by boosting domestic extraction, processing, recycling, stockpiling, and strategic partnerships with resource-rich nations.
The first ever EU–Saudi roundtable on critical raw materials was opened by the bloc’s Ambassador to the Kingdom, Christophe Farnaud, together with Saudi Deputy Minister for Mining Development Turki Al-Babtain, turning policy alignment into concrete cooperation.
Farnaud underlined the central role of international cooperation in the implementation of the EU’s critical raw materials policy framework.
“As the European Union advances the implementation of its Critical Raw Materials policy, international cooperation is indispensable to building secure, diversified, and sustainable value chains. Saudi Arabia is a key partner in this effort. This dialogue reflects our shared commitment to translate policy alignment into concrete business and investment cooperation that supports the green and digital transitions,” said the ambassador.
Discussions focused on strengthening resilient, diversified, and responsible CRM supply chains that are essential to the green and digital transitions.
Participants explored concrete opportunities for EU–Saudi cooperation across the full value chain, including exploration, mining, and processing and refining, as well as recycling, downstream manufacturing, and the mobilization of private investment and sustainable finance, underpinned by high environmental, social, and governance standards.
From the Saudi side, the dialogue was framed as a key contribution to the Kingdom’s industrial transformation and long-term economic diversification agenda under Vision 2030, with a strong focus on responsible resource development and global market integration.
“Developing globally competitive mineral hubs and sustainable value chains is a central pillar of Saudi Vision 2030 and the Kingdom’s industrial transformation. Our engagement with the European Union through this dialogue to strengthen upstream and downstream integration, attract high-quality investment, and advance responsible mining and processing. Enhanced cooperation with the EU, capitalizing on the demand dynamics of the EU Critical Raw Materials Act, will be key to delivering long-term value for both sides,” said Al-Babtain.
Valere Moutarlier, deputy director-general for European industry decarbonization, and directorate-general for the internal market, industry, entrepreneurship and SMEs at European Commission, said the EU Critical Raw Materials Act and ResourceEU provided a clear framework to strengthen Europe’s resilience while deepening its cooperation with international partners.
“Cooperation with Saudi Arabia is essential to advancing secure, sustainable, and diversified critical raw materials value chains. Dialogues such as this play a key role in translating policy ambitions into concrete industrial and investment cooperation,” she added.
