Macroeconomic Forecast Macroeconomic Forecasts - Egypt

BMI View: Despite the recent stabilisation in the EGP6.0700/US$ area, we maintain a bearish outlook on the Egyptian pound heading into the latter months of 2012. Not only does the economy’s deteriorating balance of payments position increase the risks of a forced devaluation at some point over the coming months, but we would also highlight that the increase in the currency’s real effective exchange rate since early 2011 implies such FX weakness is necessary to regain competitiveness. As a result, we are projecting further losses against the greenback towards EGP6.1500/US$ and EGP6.5000/US$ by the end of 2012 and 2013 respectively.

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