An international report expects the pound to fall
Goldman Sachs Global Bank is likely to depreciate the pound to the range of 45 and 50 pounds per dollar, before the International Monetary Fund announced a financing program for Egypt within days. In a recent report on Egypt, the bank said that through their discussions with officials in Egypt, it became clear that a concrete move towards a more flexible exchange rate regime would precede the IMF's announcement of a financing program for Egypt, which is expected over the next two weeks.
Egypt is facing severe pressure from a shortage of foreign exchange, the spread of the black market for currency trade, and the accumulation of waiting lists to finance imports during the last two years, after the exit of indirect foreign investments amounting to about $22 billion in the first half of 2022.
Goldman Sachs believed that the devaluation of the pound in banks would lead to a sharp decline in demand for speculation on foreign currencies in the parallel market, and a decline in its value.
The price of the dollar in the parallel market declined during the last 6 days by about 14 pounds, to record about 50 pounds, down from about 63.5 pounds, after the announcement of the largest investment deal between Egypt and the Emirates in the city of Ras Al-Hikma, according to which Egypt will obtain 35 billion dollars within two weeks.
In its report, Goldman Sachs ruled out that the decline of the pound to the level of 45 and 50 pounds in banks would lead to an increase in the inflation rate in the near term, given the sharp rise in the value of the pound in the parallel market during the past two weeks.
The inflation rate at the city level recorded a decline last January to 29.8% compared to 33.7% last December, according to the Central Agency for Public Mobilization and Statistics.
The bank expected that the size and speed of investment in Ras Al-Hekma would provide sufficient liquidity in foreign currencies to meet Egypt's financing needs in the near and medium term, and allow the Central Bank of Egypt to settle the accumulation of foreign currencies.
On Friday, Prime Minister Dr. Mostafa Madbouly witnessed the signing of a major investment deal with the UAE, represented by Abu Dhabi Holding Company (ADQ), to pump investments worth $35 billion into the city of Ras El Hekma within two months. The first will be in two batches, the first worth $15 billion within a week, and the second. With a value of $20 billion within the next two months.
The dollar, the devaluation of the Egyptian pound, the International Monetary Fund, the black market