The 15 percent dip comes following a decision by the Monetary Policy Committee (MPC) of the CBE in an unscheduled meeting to raise the key interest rates by one percent (100 basic points) early on Monday.

This is the biggest loss in value for the Egyptian pound versus the US dollar since its devaluation in November 2016, when it lost nearly half of its value. The dollar surged to over EGP 19 in the following weeks, but since 3 July 2017 the dollar remained under EGP 18.

Shortly after the MPC meeting on Monday, US dollar trading price reported an increase to record EGP 17.4 for purchase and EGP 17.5 for sale across local banks, before going over the bar of EGP 18 at the end of the day.

The CBE attributed its decision to rising interest rates for the first time since 2017 to the global inflationary pressures caused by the COVID-19 crisis and the Russian-Ukrainian conflict.

In a presser held on Monday, CBE governor Tarek Amer said that this action aims to preserve foreign investors and global financial market confidence in Egypt, as well as keeping foreign liquidity in the local market.

In its recent report on Egypt, issued last week, Fitch Ratings expected Egypt to experience a reduction in tourism inflows, higher food prices and greater financing challenges as a result of Russia’s invasion of Ukraine, which aggravates Egypt’s vulnerability to outflows of foreign investments from its EGP-dominated bond market.

According to JP Morgan, foreign investment in Egypt’s bond market stood at $28.8 billion at end of 2021, accounting for nearly 56 percent of foreign-exchange (FX) reserves and other FX assets of the CBE.

Reuters estimated foreign investment outflows from the Egyptian market at $3 billion since the beginning of the Russian invasion of Ukraine.

“Egypt’s reform program has placed the economy on a strong footing to weather economic disruptions as they emerge. The hard-won macroeconomic gains have provided the CBE with a strong toolkit to implement its monetary policy and maintain price stability over the medium term and with solid buffers to insulate the economy from excessive volatility,” the CBE said on Monday.