Egypt kept its custom exchange rate unchanged in May, as the Arab region’s most populous country struggles to curb a rising inflation where almost half of the population lives under the poverty limit.
Amr El-Monayer, Deputy Finance Minister for Fiscal Policies, told Reuters on Sunday that the customs exchange rate would stay unchanged at 16.5% in May.
The exchange rate for local lenders ranges between EGP 18.10 and 18.20 per US dollar, as of Monday.
Egypt first fixed the custom exchange rate at EGP 18.5 late January, in an effort to keep the Egyptian pound rate predictable for importers.
On 30 March, Egypt lowered its customs exchange rate below the market price, moving it by around 10% from EGP 17 to EGP 16.5.
“Lowering the customs exchange rate aims to decrease the cost of production and rate of inflation,” Egypt’s Minister of Finance Amr El-Garhy told Reuters after the step.
Egypt’s inflation has skyrocketed since the country abandoned its foreign exchange dollar peg last November. It hit 30.9% in March—its highest level in more than three decades.
London-based Capital Economics expects inflation to hover around 29% in 2017. The consultancy said that inflation is expected to drop to 12.5% in 2018.