The Financial Times takes a new look at the Egyptian currency devaluation possibilities given the new pressures resulting from the political instability engulfing the country. Excerpt from Stephan Wegstyl article below:
Currency traders are betting against Egypt in droves. While the central bank battles valiantly to keep the exchange rate at around 6 to the US dollar in the cash market, the Egyptian pound’s value is plunging in futures trading.
On Monday, the 12-month non-deliverable forward rate hit 7.45, its weakest-ever level, suggesting that traders expect a devaluation of nearly 20 per cent. The finance ministry tried to boost confidence by setting a new date – May 15 – for winning approval for the country’s much-delayed International Monetary Fund assistance. But with Cairo in political crisis, Washington will be in no hurry to ride to the rescue.Image: FT