The Central Bank of Egypt’s sold $200 million at an interbank auction at 8.85 Egyptian pounds per US dollar versus a rate of 7.73 previously.
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Angola’s kwanza is very close to Nigeria’s naira, with the official rate being 161, while the black market value is about 136 percent more at 380 to the dollar.
“This will resolve the exchange rate irregularities, resulting in a more regular and continuous flow of foreign currency”, it said in a statement.
On the Cairo stock exchange, the benchmark EGX30 rose more than 6 percent on Monday, buoyed by news of the long awaited devaluation.
Many Egyptians are anxious however that a devaluation would cause a surge in prices.
Tourism has always been a key source of revenue in the country, but the sector was hard-hit by the uncertainty following the 2011 uprising against President Hosni Mubarak.
“The move has motivated new mutual funds and foreign investors to enter the market again and this was proven today”, said Hannan Ramsis, a trader at the Egyptian stock exchange.
Last week, the central bank held another exceptional auction, offering $500m to help businesses obtain the foreign exchange they needed to clear imports of strategic goods which had been delayed due to the forex shortage.
At the same time, the central bank lifted caps on withdrawals and deposits of foreign currencies for individuals and companies importing essential goods, easing forex controls imposed a year ago that had all but paralysed trade.
“This is important to reflect market dynamics and alleviate pressure on the central bank of having to defend a currency peg”, he said.
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But the bank said the reserves would reach $25 billion by the end of 2016 on the back of “foreign investments and an increase in the competitiveness of the Egyptian economy”.
