CAIRO: The short-term may witness the Egyptian pound devalue to 8.5 per USD, Amr Hassanein, the Chairman of Middle East Rating and Investors Services (MERIS), told The Cairo Post.
Egypt’s pound depreciation is welcomed, despite the delay the “inevitable decision,” especially after net foreign reserves slipped to critical levels in September, Hassanein said.
Egypt’s central bank devaluated the pound for a third time in 2015 Thursday; Egypt’s net international reserves have fallen for three consecutive months to hit $16.3 billion at September-end, down from $18.1 billion a month earlier.
The steady drop of Egypt’s international foreign reserves is “credit negative,” global credit rating agency Moody’s said in a report released Monday.
“This is a moderate devaluation and does not reflect the real fair value of the local currency against the US dollar, which is less than 8 EGP/dollar,” Hassanein added.
The International Monetary Fund (IMF) praised the CBE’s efforts to curb the parallel exchange market in a recent report issued in September after concluding a mission visit to Cairo.
“We (IMF) consider that a gradual move toward a more flexible exchange rate policy focused on achieving a market-clearing rate would serve Egypt’s interests,” the IMF stated.
Such a move would improve foreign exchange availability, bolster exports’ competitiveness and attract foreign direct investment, Hassanein anticipated.