Egyptian pound forecast to drop to least 55/$ by year-end

Egyptian pound forecast to drop to least 55/$ by year-end

As Egypt still seeks a way out of its grinding foreign currency crunch, Oxford Economics has predicted that the value of local currency will drop somewhere between 55/$ and 60/$ by the end of the year if regulators switch to a flexible exchange rate regime.   The Oxford-based think tank noted that such depreciation might help close the widening gap with the black market, where the exchange rate topped 70/$ last week before moving down to nearly 58/$ on Sunday. The official exchange rate still stands at 30.9 against the green back. Based on its forecasted exchange rate, Oxford Economics expects the annual inflation to peak in Q4 2024, reaching between 40% and 45%. Headline inflation has been slowing down in recent months, reaching 33.7% in December compared to 38% in September. London-based think tank, Capital Economics released a more pessimistic forecast last week, predicting the Egyptian pound to experience “an initial fall” to 60-65/$ if regulators embark on a devaluation soon.  For almost a year, the Central Bank of Egypt (CBE) has maintained the same official rate below 31/$, ignoring calls by the IMF to adopt a flexible exchange rate. The IMF considers the devaluation of the pound essential to