Egypt's pound plunged in value on Thursday as the central bank floated the currency to address a dollar crunch that threatened to cause some imports to grind to a halt.
The dollar was trading Thursday on official markets at between 13.5 and 14 Egyptian pounds, according to several banks contacted by AFP, up sharply from the previous rate of 8.8.
The government of President Abdel Fattah al-Sisi is rolling out an austerity programme and seeking billions in support from abroad in order to meet conditions, including devaluation, for a $12 billion loan from the International Monetary Fund.
Floating the pound had long been among a list of measures demanded by investors and international creditors, but had been avoided in the fear that rising prices could provoke unrest.
Thursday's central bank decision came as a surprise, after officials said they would only consider a flotation once foreign reserves reached $25 billion, up from September's $19.6 billion.
The bank said in a statement it had moved to a "liberalised exchange rate... to create an environment for a reliable and sustainable supply of foreign currency." Egypt has struggled to boost its foreign currency reserves in the political and economic turmoil following the January 2011 uprising that toppled former ruler Hosni Mubarak.
The IMF welcomed the central bank's decision, saying it will "make more foreign exchange available".
The move "will improve Egypt's external competitiveness, support exports and tourism and attract foreign investment," IMF Mission Chief for Egypt Chris Jarvis said in a Thursday statement.
The flotation follows comments last week from IMF chief Christine Lagarde claiming Egypt was undergoing a currency "crisis" and suggesting a quick devaluation to tackle a widening gap between the official and black market rates.
Egypt's EGX 30 stock index jumped more than 8 percent after opening to 9,231 points.