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Egypt’s Status as an Emerging-Market Darling Under Threat

General Economy And Political Posters Ahead Of Egypt Election
Photographer: Sima Diab/Bloomberg

Political risk is back on the table in Egypt, and it’s threatening the country’s status as an emerging-market darling.

Egyptian assets have come under pressure since Friday’s anti-government protests alleging corruption in the military, with 12-month NDF contracts for the pound rising the most since March 2017 to 18.38/USD (versus the spot rate of 16.29). Stocks have fallen almost 7% in two days, the most in more than three years and the biggest drop by far among equity markets worldwide.