Egypt has devalued its currency by 48%, a measures that met a key demand by the International Monetary Fund (IMF) in order to secure a $12bn loan. The devaluation pegged the Egyptian pound at 13 to the dollar, up from nearly nine on the official market, informed The Guardian. Accordingly, Egypt’s central bank (CBE) sold $100m to local banks in an exceptional foreign exchange auction held on at a cut-off price of EGP 13. CBE will halt its weekly forex auction regularly held on Tuesday, saying it will intervene only when necessary, informed Ahram Online.

The CBE said it will allow “the supply-and-demand mechanism” to set the prices of foreign currencies, giving local banks the green light to freely change the exchange rate and helping to eradicate trading on the black market. The bank added that the measures were part of the government’s reform program and designed to “completely end” the unofficial currency market. The measures would “empower the Egyptian economy to face the present challenges, unleash its potential and achieve the hoped-for growth.”

The much heralded central bank decision followed a sharp and sudden decline this week in the value of the dollar on the unofficial market, plunging from an all-time high of EGP 18.25  to about 13 to the USD. However, The IMF’s executive board has yet to ratify the $12bn loan provisionally agreed between Egypt and the lender of last resort in August.