Egypt surprised the financial markets on Jan. 29 by floating its currency, the pound, which has previously been maintained at a managed rate. The move came after three years of recession, thanks in part to an overvalued currency, which makes Egyptian exports uncompetitive. The International Monetary Fund has for years urged a free float for the pound, but President Hosni Mubarak's government has dawdled, fearing that a drop in the currency might be interpreted as a sign of instability. On the first day of the new regime, the pound tumbled 15%, to a rate of 5.34 pounds to the U.S. dollar.
Edited by Rose Brady