The Clap:
In a new report the Bank of America (BoA) said that the current USD/EGP exchange rate of the Egyptian pound is approaching its fair value, and currently projects the pound to strengthen in the near term amid recent FX inflows, which have offset the anticipated deficit in the balance of payments.
Remember:
The USD had risen beyond the EGP 48 mark late last month, but has dipped below the level once again (EGP 47.99 as of yesterday.)
More forecasts:
The bank also projects that the second tranche of the IMF loan, in addition to inflows from the Ras Al-Hikma deal — expected to collectively total between USD 5-10 billion — could cover Egypt’s external financing gap for a period ranging from one to two years.
Interest rate projections:
The lender expects the Central Bank of Egypt to continue tightening its monetary policy while maintaining stable interest rates in the near term. BoA also anticipates that the real interest rate in Egypt — lending interest rate adjusted for inflation — will become positive by 4Q 2024.
