HSBC forecasts Egyptian pound devaluation to EGP 40-45 against USD in Q1 2024

These revised forecasts are higher than the bank's previous expectations, which placed the exchange rate between EGP 35 and EGP 40 per $1 during the same period.

The Egyptian pound has maintained stability in official transactions for several months, remaining at EGP 30.9/$1, following a series of three devaluations initiated since March 2022, which made the Egyptian pound lose over 75 percent of its value against the US dollar, the report highlighted.

However, the Egyptian pound in the parallel market reached EGP 50/$1, the report stated.

HSBC underscored that adjusting the exchange rate of the Egyptian pound is part of a broader shift towards a more flexible exchange rate regime.

“This adjustment is also expected to facilitate the completion of the long-awaited first review of the International Monetary Fund's reform programme,” HSBC added.

In October, Fitch Solutions predicted an 18.6 percent devaluation of the Egyptian pound, bringing it to EGP 38 against the US dollar by the end of 2023.