The Clap
Despite the EGP’s official value hovering around the EGP 24.5/USD mark, it’s being sold for up to EGP 36/USD on the black market according to a report Goldman Sachs, which begs the question of what can be done.
What
The multinational bank attributed the crisis to the lack of foreign currency after foreign investors took their money out of Egypt following Russia’s invasion of Ukraine, as well as a growing trade deficit due to imports exceeding imports.
So what
The report expects the Central Bank of Egypt (CBE) to intervene, but the extent of its intervention will be based on the availability of foreign currency.
Now what
With the IMF set to meet this Friday where it’ll discuss Egypt’s loan, Goldman Sachs doesn’t rule out another “Special CBE Meeting” where interest rates would be raised at least 1% to encourage investment inflows to Egypt.
