Interest rates would remain at 19.25% until the end of the year, compared to previous estimates of 21.25%, the bank explained in its note
Egypt will most likely not conduct another currency devaluation until the end of the year, Standard Chartered Bank said in a research note over the weekend, overturning its previous forecast in which it predicted the EGP to fall to EGP 36 against the USD.
Interest rates would remain at 19.25% until the end of the year, compared to previous estimates of 21.25%, the bank explained in its note.
“The way markets have understood moving forward the presidential elections from Q1 2024 to December is that the reforms initially earmarked for 2023 will wait until after the election,” explained Standard Chartered Bank economist Carla Slim to Asharq Business last week.
The bank noted that, while there is still a risk of currency devaluation, Egypt is less likely to devalue the Egyptian pound before the end of 2023. Asharq highlighted that the change in the forecast was announced in light of recent comments by IMF head Kristalina Georgieva and Egyptian officials over the past week.
Georgieva praised Egypt’s progress in meeting the IMF’s conditions for its $3 billion loan last week, noting “Fiscal policy, the implementation of privatization strategy, the engagement with our team on how to best conduct monetary policy in these very challenging times”.
IMF’s director for the Middle East, North Africa, and Central Asia, Jihad Azour, was quoted on a separate occasion during the annual World Bank and IMF meetings in Morrocco, stating that the IMF and Egypt “are combining the first and the second review and when we get there, it means that strong progress has been achieved”.
