Egypt’s central bank hiked rates by 600 bps causing the Egyptian Pound (EGP) to drop almost 40% versus the US Dollar (USD) to the 50.00 mark. Economists at ING analyze USD/EGP outlook.

Key reforms point to Egyptian Pound stabilisation

Egypt's 600 bps rate hike and subsequent FX devaluation from the Egyptian central bank point to significant reform progress, with an improved IMF deal agreed following the recent announcement of investment from the UAE.

We think USD/EGP can now stabilise at the 50.00 mark before a gradual transition to a more free-floating exchange rate materialises.