Standard Chartered revises prediction for pound devaluation, says not likely before 2024

Cairo – October 15, 2023: While the risk of another devaluation of the Egyptian pound is there, Egypt is less likely to devalue the pound by the end of the year, explained Standard Chartered Bank said in a research note over the weekend, overturning its previous forecast in which it predicted the LE to fall to LE 36 against the USD.

“The way markets have understood moving forward the presidential elections from Q1 2024 to December is that the reforms initially earmarked for 2023 will wait until after the election,” explained Standard Chartered Bank economist Carla Slim to Asharq Business last week.

The revision comes in light of recent comments by the International Monetary Fund’s Managing Director, Kristalina Georgieva, and Egyptian officials over the past week.

The IMF head praised Egypt’s progress in meeting the IMF’s conditions for its $3 billion loan last week, noting “Fiscal policy, the implementation of privatization strategy, the engagement with our team on how to best conduct monetary policy in these very challenging times”.

IMF’s director for the Middle East, North Africa, and Central Asia, Jihad Azour, was quoted on a separate occasion during the annual World Bank and IMF meetings in Morrocco, stating that the IMF and Egypt “are combining the first and the second review and when we get there, it means that strong progress has been achieved”.

Interest rates would remain at 19.25 percent until the end of the year, compared to previous estimates of 21.25 percent, the bank explained in its note.