Goldman Sees Egypt Inflows, Smoother IMF Path After Pound Plunge
- Central bank allows currency slump after raising interest rate
- Pound drop evokes flashback of 2016 move that had happy ending
This article is for subscribers only.
Egypt’s move to allow a weaker pound is winning praise from money managers including Goldman Sachs Group Inc. who say it will arrest foreign-capital outflows and boost the nation’s chances of winning the next International Monetary Fund loan.
The pound tumbled 14% to 18.2202 per dollar in the offshore market, its sharpest drop since a November 2016 devaluation that had helped to pull the country out of a dollar squeeze and turned it into a market darling. Investors are predicting a similar turnaround this time as the nation grapples with surging inflation and external imbalances, both worsened by the war in Ukraine.