The Impact of Egypt’s Currency Devaluation on Local Startups

The Egyptian currency has witnessed major volatility in the past two years in particular, after enjoying a relatively stable currency position since the Egyptian Pound adopted a free-float approach in November 2016. The Egyptian Pound has changed its pegging to numerous standards, starting with the gold standard from 1885 to 1914, to the British pound from 1914 to 1962, and to the US dollar from 1962 to 1989, until it was eventually floated. While the currency was floated, it was tightly managed by the Central Bank of Egypt until 2001, subsequently which the country depended on utilizing policies to manage the float. Eventually the Central Bank was forced to end the managed-float regime to adopt a free float in November 2016, a move that caused the Egyptian Pound to fall twofold in value.