Egypt Devaluation Calls Grow Louder, Longer as Crunch Time Nears
- Ahead of IMF review, derivatives market signals currency drop
- Egyptian pound is still a ‘very managed’ currency, abrdn says
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Traders are on a record-long streak of hedging against a decline in the Egyptian pound as some Wall Street banks warn growing pressures on the currency could soon force the central bank’s hand in allowing another devaluation.
Time may be short for a country facing what Citigroup Inc. said is growing pent-up demand for dollars that won’t ease without more currency flexibility and stronger investment flows. Half measures haven’t been enough, stalling deals and resulting in an underperformance of Egypt’s bonds.