Cairo – Mubasher: Beltone Financial said it believes the Central Bank of Egypt (CBE) will adopt more devaluation of the Egyptian pound against the US dollar amid the availability of all the catalyst factors for moving away from the current fixed exchange rate policy.
CBE is expected to make this move before the forthcoming IMF delegation visit to Egypt next Friday, which will be considered a good initiative to facilitate the loan talks, said Beltone.
Earlier, Egypt's finance minister Amr El-Garhy announced later last night that the government is looking at about $ 7 billion per year over three years, including $ 4 billion annually from the IMF and a further $ 2-3 billion per year between international bond issuances ($2-3 billion) and budgetary support from the World Bank and African Development Bank ($3 billion over upcoming 2 tranches.
“The fair value for the US dollar against the Egyptian pound isn’t far from EGP 11 to EGP 12, and it could be nearing EGP 10 currently, especially if the cash flows of the dollar – dominated treasury bills witnessed remarkable recovery,” added the research note.
Meanwhile, Beltone expects CBE to raise interest rates on the next Monetary Policy Committee (MPC)
The US dollar is currently traded at EGP 12.6 against Egypt’s pound on the parallel market, after it hit the levels of EGP 13 and EGP 13.25 earlier this week, according to Beltone.
