Noman Khaled, Arqaam Capital’s deputy director and macroeconomic analyst, said the Egyptian market is seeing proactive measures to reduce the pound and reach an agreement with the International Monetary Fund.
Khaled added in an interview with “Al Arabiya” that the availability of Undeliverable futures contracts on currencies It helps to stabilize the price of the currency in which the import is made.
He explained that these contracts help companies run their business without reservations or worries about currency price fluctuations.
Khaled indicated that this instrument is a strong indication of the impending devaluation of the Egyptian pound, noting that such steps were taken in 2016 prior to the decision to float.
He expected that the deal with the IMF and the devaluation of the pound would be revealed within a few days or weeks, and the dollar exchange rate could hit the 21 and 22 pound levels at first, and some hikes could occur, but our expectations suggest reaching these levels by the end of the year.
He said Egypt’s net foreign assets amount to a negative $ 20 billion, which is a debt to the outside world, adding that other pressures on withdrawals or measures that have recently been curtailed are adding to the pain of deepening the deficit. of foreign activities during the next period.
Khaled believes that increasing the yield on dollar certificates of deposit to levels between 5% and 6% is nothing more than an attempt by banks to attract existing dollar flows into the local market.
