Egypt expected to devalue the EGP... what if it doesn’t in the short term?
unlike the international expectations of Egyptian pound devaluation as a step forward to boosting the economic situation after the economy was affected by the global circumstances, Citigroup anticipated that the Central Bank of Egypt (CBE) will hold any move on its currency until the end of current fiscal year, which ends on June 30.
Citigroup clarified that the CBE would freeze any movement of the pound not to derail the government's target of a 6.5 percent budget deficit and not to negatively affect the gross domestic product (GDP).
According to the Citigroup report which is cited by Bloomberg, the CBE will also probably wait for “bumper tourism” revenues of about $14 billion to filter through the economy before deciding on the need for another pound recalibration.
The Egyptian pound, which recorded stable records at the banks during the last period, witnessed a surge in the black market in a step that caused a delay in the International Monetary Fund (IMF) review of Egypt receiving the second tranche of the $3 billion loan agreement. In addition, investors questioned the state’s flexible currency regime. As a result, Gulf countries asked for a liberalized currency before investing in the Egyptian public offering program, which could provide Egypt with about $2 billion, according to official estimations.