What is the Egyptian pound (EGP)?
The Egyptian Pound (EGP) is the official currency of the Arab Republic of Egypt, designated by ISO 4217, the international standard for currency codes. The symbol for the Egyptian pound is E £. The coin can also be marked with the symbol LE, which stands for Egyptian book, French for Egyptian pound. The Egyptian pound is also used, unofficially, in the Gaza Strip and parts of Sudan.
As of the second quarter of 2021, an EGP is worth approximately $ 0.064 in United States dollars (USD).
- The Egyptian pound (EGP) is the official currency of the Arab Republic of Egypt, with the symbol E £.
- Initially backed by precious metals, the Central Bank of Egypt stepped in and began a managed float from 2001 to 2016, at which point it moved to a free float.
- Before floating, one US dollar was worth 8.8 Egyptian pounds. After this action, with the disengagement, one dollar was equal to about 15 Egyptian pounds.
- The EGP is also used as an unofficial currency in regions such as Sudan and the Gaza Strip.
Understanding the Egyptian pound (EGP)
The Egyptian pound (EGP) replaced the Egyptian piastor in 1834. The new issue of currency had a fixed rate bimetallic gold and silver standard. The piastra continued to circulate as a hundredth of a pound, essentially becoming a penny. In 1916, the coin was divided again and renamed by thousandths.
The EGP was linked first to the bimetallic gold and silver standard and then to the British pound sterling (GBP) until 1962. Egypt founded a central bank in 1961. The Central Bank of Egypt, located in Cairo, became the monetary bank of the Arab Republic. authority and controlled the circulation of the Egyptian pound. In 1962, Egypt changed the valuation of the pound and pegged it to the USD. The Egyptian pound devalued against the USD in 1973 and by itself in 1978. From then on, the EGP had a floating exchange rate.
Seeing the value of the EGP fall, the Central Bank of Egypt stepped in and began a managed float in 2001. The managed float continued until 2016 when the bank decided in favor of allowing the currency to float freely again. With this decision, the value of the currency plummeted.
After the central bank’s decision to float the currency, the EGP devalued by 32.3% and continued to lose value. In addition, the bank raised interest rates by 300 basis points to curb expected inflation. The International Monetary Fund (IMF) required the devaluation of the EGP as a condition for Egypt to receive a loan of $ 12 billion.
Before floating, one US dollar was worth 8.8 Egyptian pounds. Whereas after this action, with the untying, a dollar was equivalent to about 15 Egyptian pounds. In July 2021, one US dollar is worth 15.7 Egyptian pounds.
Slang names for the Egyptian pound (EGP)
Egyptian banknotes have English and Hindi-Arabic numerals on one side and Arabic text with Oriental Arabic numerals on the other. Egyptians have different slang nicknames for various denominations of the pound.
- Baku or package, for 1,000 EGP banknotes
- Rabbit, or rabbit, for 1,000,000 EGP banknotes
- Feel, or elephant, for 1,000,000,000 EGP banknotes
In 2006, Egypt introduced 50 piastres and 1 pound coins, showing the faces of Cleopatra and Tutankhamen, and gradually phased out banknotes for those denominations.
Egypt’s economy and inflation
The ancient country of Egypt is located on the Mediterranean and is a land rich in ancient history. The region saw the development of writing, agriculture, and organized religion and government.
Egypt was under Ottoman and British rule until it was declared a republic in 1953. Decades of involvement in regional wars, including those in Yemen, the Sinai Peninsula and the Gaza Strip, have affected the nation, its economy and its people.
The economy of the Arab Republic of Egypt depends on agriculture, oil and tourism. There is still a big difference in income and wealth distribution. Egypt’s economy, like the rest of the world, was hit by the COVID-19 pandemic. Tourism, in particular, was severely affected, generating $ 1.8 billion in revenue between July and December 2020 compared to $ 7.2 billion in the same period in 2019.
Interest rates were lowered in response to damaging COVID-19 lockdown measures. However, the country still has one of the highest real interest rates in the world, which has helped sell Treasuries and protect the currency, but discouraged lending.
High inflation became a big problem after Egypt was forced to implement austerity measures in exchange for receiving financial assistance from the IMF. Actions such as raising fuel prices, adding additional tobacco taxes, and devaluing the currency led to inflation rising to 33% in July 2017.