There is still a state of controversy over the future of the Egyptian pound against the US dollar. While the local currency market is experiencing a calm and stable state, agencies continue to deliver negative forecasts.
In recent research, the “Fitch” rating agency suggested that the Egyptian pound will continue to decline against the US dollar and it is likely that the US currency will run out. questyear at the level of 21 pounds.
And he revealed in his updated monthly report on the outlook for the Middle East and North Africa region that he is strong performance of the dollar and the delay in reaching an agreement with the International Monetary Fund led to a greater than expected decline in the value of the pound against the dollar.
He said: “Until the government manages to reach an agreement with the IMF, the pressure on the exchange rate will continue due to the strong dollar and the shortage of foreign exchange, as well as speculation about the decline in the pound.”
Fitch does not expect the pound to slow down before the second half of 2023. It believes the dollar will reach its peak in that moment with the stability of the economy and the return of capital flows, to register around 22 pounds against the dollar by the end of next year.
The agency raised its forecast for Egyptian GDP growth for 2022 to the level of 6.59%, up from 6.23% previously.
Read more: The price of the dollar in Egypt continues to breach historical levels against the pound
Interestingly, the Egyptian pound has lost nearly a quarter of its value against the dollar since the beginning of quest’year. Experts predict that the pound exchange rate will drop between 22 and 24 pounds against the dollar.
Bloomberg Economics had estimated that the appropriate exchange rate for the local currency against the dollar would be £ 24.6, in so that the trade deficit reached a reasonable level.
He said some large banks around the world believe the Egyptian pound is still expensive in light of the dollar’s rise, even after the Egyptian central bank devalued the pound by around 15% at its extraordinary meeting last March.
Read more: “Kuwait National” in Al Arabiya: The pressure on the Egyptian pound is not new and the current crisis will pass
Derivatives traders have increased their bets that Egypt will allow the pound to decline further, after the International Monetary Fund announced that it plans to reach an expert-level agreement with Egypt on a very soon. new funding program. This was reflected in the undeliverable futures market, where the one-month contract on the pound fell to 21.7 per dollar, while the three-month contract fell to 22.9 pounds and is on track to register its lowest closing ever.
And according to Bloomberg, the latest bet points to a 14% drop in the currency, which last Monday hit an all-time low of 19.7031 pounds per dollar in foreign trade.
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