2023-05-28 11:38:00
02:38 PM
Sunday, May 28, 2023
I wrote – Manal Al-Masry:
Credit Suisse, one of the Swiss international banks, expected a new decrease in the exchange rate of the pound once morest the dollar during the next three months due to the slow implementation of the reform process, provided that it will return to improvement within the next 12 months.
Credit Suisse suggested, in a research paper that Masrawy viewed a copy of under the title (Egypt’s Strategy), that the pound would witness a new depreciation during the next 3 months to a level between 45 and 50 pounds, before recovering by 25% and 30% over the next 12 months. this level.
In its report, the bank indicated its expectations that the pound will recover over the next 12 months following the decline, to return to the rise once morest the dollar to the level of 33 and 34 pounds per dollar, in the event that the government succeeds in making progress in the economic reform program.
In the research paper, the bank stated that its view corresponds to the market view, which recorded an implied depreciation of the currency by 30% to 45 pounds per dollar, due to its growing concerns in February with the failure to achieve the hoped-for progress in the economic reform program.
Egypt’s return to a flexible exchange rate following it was suspended over the years 2020 and 2021 led to a significant decline in the pound since March of last year, as a result of which the price of the dollar once morest the pound rose by regarding 96%, from the level of 15.76 pounds on March 20, 2022 to 30.94 pounds in bank transactions. Today, Sunday, according to central bank data.
While the rate of inflation – and the pace of price rises – is likely to decrease in the coming months, the delay in the reform process has nonetheless reduced the potential for a long-term bullish trend for the pound, according to the bank.
“The longer it takes the government to embark on the long-awaited reform steps, the more strongly we expect the risk of devaluation will increase, as the depreciation of the pound once morest the dollar has led to higher inflation,” according to the report.
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