Monday's weakening of the pound could catalyse inflows of foreign currency, while investors who already had money in Egyptian treasuries would be unlikely to sell now, said Farouk Soussa, senior economist at Goldman Sachs. Sisi flew to Riyadh to meet Saudi leaders on March 8. The UAE, along with Saudi Arabia, has been a strong financial backer of Egypt. The IMF in Cairo was not immediately available for comment.Ību Dhabi Crown Prince Mohammed bin Zayed al-Nahyan arrived in Egypt on Monday to meet President Abdel Fattah al-Sisi. 'However, it will be key whether policymakers now allow the pound to float more freely or continue to manage it and allow external imbalances to build up once more, possibly resulting in future step devaluations like today's,' Swanston said.

'This is a good move to make as the devaluation of the pound moves it roughly in line with its fair value and it could pave the way for a new IMF deal,' said James Swanston of Capital Economics. The correction would make exports competitive and help preserve foreign currency liquidity.Įgypt has been in discussions with the International Monetary Fund about possible assistance, people close to the negotiations have said, but it has not announced any formal request. The central bank also hiked overnight interest rates by 100 basis points in a surprise monetary policy meeting.Įgypt's central bank governor, Tarek Amer, told a press conference the pound had undergone a 'correction' that reflected world and local developments. The pound dropped to 18.17-18.27 against the dollar, Refinitiv data showed, after having traded at around 15.7 pounds to the dollar since November 2020.

Government sets prices for non-subsidised breadĬAIRO, March 21 (Reuters) - Egypt devalued its pound by 14% on Monday after Russia's invasion of Ukraineprompted foreign investors to pull billions of dollars out of Egyptian treasury markets, putting pressure on the currency.

Higher wheat import prices drive inflation.Central Bank hikes overnight rates 100 basis points.Move could pave way for IMF agreement, analysts say.

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