There is plenty of speculation about the potential for a further devaluation in the Egyptian pound (EGP) following a 17% devaluation in March. In the view of economists at ING, Egyptian pound could devalue again at any time.

Central bank governor resigned on Wednesday

“The central bank governor resigned yesterday ahead of today’s policy meeting. Consensus expectations are for a 50 bps hike and it may be a good time to announce an FX devaluation, too.”

“The strain this year has come from a weakening current account, along with foreign investor outflows from local T-bills.”

“Pressure on the EGP is being witnessed through the Non-Deliverable Forwards market, where 3m implied yields for EGP are now 45%, pencilling in outright levels for USD/EGP over 21 in three months’ time.”