Report: Expectations that the Egyptian pound will float after billions from the Emirates Report: Expectations that the Egyptian pound will float after billions from the Emirates

Report: Expectations that the Egyptian pound will float after billions from the Emirates

Report: Expectations that the Egyptian pound will float after billions from the Emirates

EFG-Hermes global research expected that the Central Bank of Egypt would float the pound, taking advantage of the proceeds of the Ras al-Hikma deal amounting to $24 billion in cash, in addition to another $11 billion.

EFG-Hermes research suggested a temporary increase in demand for the dollar coinciding with the overshooting of the pound, or what is known as “excessive price response,” to reach the level of 50 pounds, before stabilizing in the range of 40-45 pounds.

She added that reducing the pound would bridge the gap between the official and parallel markets, and reach the stage of price unification, in addition to preserving a good batch of foreign reserves.

She explained that the Central Bank of Egypt will move to settle some points related to the economic reform program with the International Monetary Fund to maintain pressure on the parallel market before floating the pound.

She stressed that the Egyptian economy still needs to tighten monetary policy to confront inflation, noting that 45-40 pounds to the dollar is an appropriate level to raise the interest rate.

She expected the Central Bank to raise interest rates by about 200 basis points to reach 24% during the current year.

At the same time, she expected the inflation rate to decline to between 11-13% by the end of 2024, stressing that this would help the central bank to begin reducing interest rates before the end of 2024.

Egyptian Prime Minister Mostafa Madbouly witnessed the signing ceremony of the largest investment deal with major entities. He said that the “Ras El Hekma” project is the largest investment project in the history of Egypt, and that there is a large sum estimated at 35 billion dollars that Egypt will receive during the coming period.

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