Will Egypt’s Currency Reform Raise Risk of Revolt?

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Last November, Egypt’s Central Bank announced it was taking steps to allow the pound to trade freely on the currency market. The move to float was widely regarded as a necessary, but incredibly difficult one. The Central Bank had held the pound at around eight to the dollar; today it stands closer to 18 pounds to the dollar. As expected, the decision led to a 12 billion dollar loan from the International Monetary Fund (IMF) and a reform plan designed to attract foreign investment, boost growth, and shore up the country’s reserves.

But floating the currency raised immediate concerns about its effects on the lives of Egyptians and on the country’s stability: the economy’s deterioration had already been tied closely to the security situation, and the specter of the 1977 bread riots loomed large. Particularly, the country’s tourism industry had been reduced to a shadow of its former self, in part due to high-profile attacks targeting foreign nationals, dealing a blow to foreign currency reserves.

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