Devaluation will raise pound to LE45-50 against USD: JP Morgan

Any further devaluation will push the Egyptian pound to LE 45-50 territory, explained financial firm JP Morgan in a recent research note, adding that recent news of fresh foreign currency inflows into Egypt will help stabilize the pound and lower the black market exchange rate.

JP Morgan expects that any currency adjustment will be accompanied by an increase in deposit interest rates by an additional 2 percent.

This follows the recent results of the central bank’s Monetary Policy Committee, which raised  key interest rates by 2 percent during its first 2024 meeting, citing ongoing trade disruptions in the Red Sea and an uncertain inflation outlook.

The financial firm also noted that it expects Egypt and the International Monetary Fund (IMF) will finalize a new agreement for its $3 billion loan during the first half of 2024, leading to an adjustment of the LE and tightening of monetary policy.