Egyptian pound
This is leading to a “lower roll-over of positions,” particularly as the finance ministry has until recently resisted raising yields at auction in order to keep the cost of borrowing down, said Goldman Sachs
The LE is currently trading at approximately LE 49.14 to the dollar locally, deepening the losses from October and reflecting broader economic challenges
Starting May 1, 2025, the company will transition payments for Egyptian residents from US dollars to the Egyptian pound.
The firm warned that continued unrest, particularly in Gaza and along the Israeli-Lebanese border, could perpetuate instability and investor concerns about Egypt’s economic outlook.
In the 24 hours after the Central Bank of Egypt's (CBE) decision to float the Egyptian pound on Wednesday, leading to a significant decline of 62 percent in value, the pound displayed resilience
The highest dollar rate on Wednesday reached LE 50.75 for buying and LE 50.85 for selling at Credit Agricole Egypt, MIDBANK, Abu Dhabi Islamic Bank Egypt, Abu Dhabi Commercial Bank Egypt, and Emirates NBD Egypt.
JP Morgan expects that any currency adjustment will be accompanied by an increase in deposit interest rates by an additional 2 percent
The bank believes that, under the current circumstances, it is unlikely that any reduction in the value of the Pound would achieve the goals of the Egyptian government.
“We think more clarity on exchange rate policy would benefit trade and economic growth and trigger an increase in remittance inflows,” S&P wrote in its report
The committee head stressed that certain requirements must be met prior to any devaluation or currency adjustment, emphasizing the need for a sustained decline in inflation rates.
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
The bank stressed that the pound’s adjustment is simply part of a wider transition by the government toward a more flexible exchange rate regime
In a research note seen by the news outlet, Morgan Stanely suggested Egypt implement a “phased devaluation of the pound in the short term, rather than a complete floatation of the exchange rate” rather than a free float
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
At last year’s Egypt Economic Conference, then-acting CBE governor Hassan Abdallah announced that the central bank was developing an index for the LE that would potentially link it to a basket of foreign currencies
Capital Economics projects that the Egyptian pound will depreciate to 35 per dollar by the close of 2023, marking a 12 percent devaluation from its current rate of 30.95 per dollar.
What if Egypt won’t devalue its currency in the short term?
Since the beginning of March, the exchange rate has witnessed successive declines, heading towards LE 31.
At the National Bank of Egypt (NBE) and Banque Misr, the dollar rate registered LE 29.90 for buying and LE 30.00 for selling.
The exchange rate of the Russian ruble against the Egyptian pound recorded about 43 piasters, according to the list of the Russian Central Bank.
