Adopting new flexible FX policy should settle pound at LE 39.61 against USD by 2028: IDSC

Cairo – January 8, 2024: Egypt aims to stabilize the Egyptian pound against the USD at LE 39.61 by 2028 after adopting its flexible exchange rate policy, revealed the cabinet’s media center over the weekend.

Titled “Document Highlighting the Strategic Directions for the Egyptian Economy for the New Presidential Term (2024-2030),” the document revealed that the government aims to stabilize the pound at LE 33.45 against the USD in 2024, with a slight bump to LE 35.5 by 2025.

These expectations are significantly lower than most forecasts by international institutions.

In late December, HSBC revealed its expectations that the Egyptian pound will undergo another devaluation in the first quarter of 2024, anticipating rates to reach LE 40-45 against the US dollar.

At the end of November, Fitch Solutions’ BMI forecasted the LE to depreciate to 40-45 against the USD in February 2024, while EFG Hermes believes that the LE will fall to LE 40 against the USD.

Some media reports placed the LE at 54 per USD in the black market during the weekend prior to the document’s release. The official price remained at LE 30.96.

The government’s 2030 strategy included driving inflation down to 9.2 percent on average between 2024 and 2028, with a further decline to 5 percent by 2030.

Egypt also looks to lower the annual current account deficit to 2.6 percent of the GDP on average by 2028. In a release last week, the Planning Ministry revealed that Egypt’s current account deficit reached $4.71 billion in FY2022/2023 at around 1.42 percent of the country’s GDP.