{"id":324975,"date":"2022-03-22T13:24:35","date_gmt":"2022-03-22T13:24:35","guid":{"rendered":"https:\/\/egy-africa.com\/en\/?p=324975"},"modified":"2022-03-24T13:14:43","modified_gmt":"2022-03-24T13:14:43","slug":"egypts-pound-depreciation-to-grab-foreign-capital-inflows-allows-smoother-imf-path-goldman-sachs","status":"publish","type":"post","link":"https:\/\/egy-africa.com\/en\/2022\/03\/22\/egypts-pound-depreciation-to-grab-foreign-capital-inflows-allows-smoother-imf-path-goldman-sachs\/","title":{"rendered":"Egypt\u2019s pound depreciation to grab foreign capital inflows: Goldman Sachs"},"content":{"rendered":"

Egypt\u2019s move to depreciate its pound will arrest foreign-capital outflows and boost the nation\u2019s chances of winning the next International Monetary Fund (IMF) loan, according to Goldman Sachs Group Inc.<\/p>\n

The Egyptian pound was depreciated as much as 14 percent to 18.2323 against the U.S. dollar in the offshore market, its sharpest decline since a November 2016 devaluation that had helped to pull the North African country out of a dollar squeeze and turned it into a market darling.
\nThe country grapples with surging inflation and external imbalances, both worsened by the Russian war in Ukraine.<\/p>\n

The Central Bank of Egypt\u2019s 100 basis-point rate hike, also announced Monday, turns the country\u2019s real interest rate positive, said Goldman Sachs, while the pound\u2019s depreciation eases concern it\u2019s overvalued.<\/p>\n

The decisions come amid foreign outflows of more than $15 billion from the local debt market in the past three weeks alone, according to Goldman estimates, and as Egypt holds talks with the IMF for various options<\/a> including a precautionary and liquidity line of credit.
\n\u201cIt will help catalyze fresh inflows into the market as investors perceive a reduced risk of further devaluations, and even the possibility of some appreciation in the coming months,\u201d Goldman Sachs economist Farouk Soussa wrote in a note.
\n\u201cIt also smooths the path for an IMF programme which we believe will help anchor confidence in Egypt\u2019s fiscal and reform trajectory.\u201d Soussa added.
\nThe pound fell after policymakers had stressed \u201cthe importance of the exchange-rate flexibility to act as a shock absorber to preserve Egypt\u2019s competitiveness.\u201d Before Monday, the Egyptian currency had been steady in the 15.5-15.9 range since September 2020.
\nWith high interest rates, a stable pound and a track record of market-friendly moves, Egypt had been a favourite of emerging-market investors for years, Goldman Sachs said. However, in the past few months, sentiment had deteriorated rapidly with growing energy prices and global monetary tightening hurting one of the Middle East\u2019s most indebted nations.<\/p>\n","protected":false},"excerpt":{"rendered":"

Egypt\u2019s move to depreciate its pound will arrest foreign-capital outflows and boost the nation\u2019s chances of winning the next International Monetary Fund (IMF) loan, according to Goldman Sachs Group Inc.<\/p>\n","protected":false},"author":4,"featured_media":322012,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[33,21],"tags":[],"class_list":["post-324975","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-main","category-news"],"yoast_head":"\nEgypt\u2019s pound depreciation to grab foreign capital inflows: Goldman Sachs - egy-africa<\/title>\n<meta name=\"description\" content=\"Egypt\u2019s move to depreciate its pound will arrest foreign-capital outflows and boost the nation\u2019s chances of winning the next International Monetary Fund (IMF) loan, according to Goldman Sachs Group Inc.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/egy-africa.com\/en\/2022\/03\/22\/egypts-pound-depreciation-to-grab-foreign-capital-inflows-allows-smoother-imf-path-goldman-sachs\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Egypt\u2019s pound depreciation to grab foreign capital inflows: Goldman Sachs - 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