Speculation is falling in the Egyptian pound against the dollar..and the IMF is optimistic
Speculation continues on the Egyptian pound in the futures market, to record yesterday, Thursday, the level of 42 pounds per dollar, while it stands at 31 pounds per dollar in the official market.
The price of the pound has declined by about 50% since March of last year, and it was trading at 30.9 in trading yesterday, Thursday.
The issue of Egypt was present at the meetings of the International Monetary Fund in Washington, where the Fund’s director, Kristalina Georgieva, indicated her confidence in reaching positive results in the negotiations with Egypt.
The Director of the International Monetary Fund, Kristalina Georgieva, said that Egypt, like other member countries of the Monetary Fund, has witnessed many unusual pressures that came as a result of shocks during the past few years.
“Because Egypt is very dependent on grain imports that come from the war-torn region, which played a major role in that,” she added.
Georgieva explained, “We agreed on a good program, which includes 3 main axes – first – liberalizing the exchange rate – secondly, providing more opportunities for the private sector to play a greater role in creating jobs and contributing to growth – thirdly, managing long-term investment programs, which are very important.” And good for Egypt, but certainly in the current tightening environment, this may lead to negative effects on the micro-economy, given the schedule for implementing reforms, which was set under different circumstances.
Georgieva indicated that the fund is now preparing to continue the review, and the two teams are working together, and I am confident that we will produce good results, and she said, “We witnessed in Egypt a deeper understanding of the extent of complexity, not only in the local environment, but also at the global level.”
It seems that the markets are counting on an imminent decrease in the price of the pound against the dollar, and there are strong indications of that.
One of these indicators; London-traded securities of Egypt’s largest listed bank indicate expectations of another devaluation of the North African country’s currency. CIB’s Certificates of Deposit are trading on the London Stock Exchange at a 31% discount to its share price in Cairo, the widest difference since August 2016. “This reflects expectations that Egypt will allow its currency to depreciate again,” according to Hassan Malik, strategist at Telemer. ” in Dubai.