Understanding the Implications of Devaluation

By: Beesan Kassab and Reham al-Saadany

In recent weeks, mounting evidence has led many to believe that the government’s official recognition of the real value of the pound is imminent. The value of the currency has been steadily depreciating since its recent flotation in January 2023, with the exacerbation of the foreign currency shortage crisis. The current official exchange rate of the US dollar (around LE31 to the dollar) does not align with market reality, where the dollar is valued between LE60 and LE70.

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