Egyptian Pound Breaches 50: Market Pressures and IMF Implications

The Egyptian pound closed over the 50-pound mark per dollar for the first time since March, a pivotal change influenced by an $8 billion IMF deal. Upcoming treasury bill maturations and IMF repayments, alongside rapid money supply growth, amplify currency pressure and inflation concerns.

The Egyptian pound has surpassed the 50-pound threshold against the dollar for the first time since March, as reported by Egypt's central bank on Thursday. This shift highlights ongoing economic pressures and the implications of an $8 billion financial agreement with the International Monetary Fund (IMF).

Since Egypt's deal with the IMF on March 6, the pound has navigated near the 50 mark, constrained by the promise to allow market supply and demand to dictate the currency's valuation. Recent weeks have seen intensified pressure, exacerbated by the upcoming maturation of Egyptian pound treasury bills held by foreign investors, as noted by analysts and industry insiders.

The maturity of substantial treasury bills in December and March threatens to increase dollar demand, particularly if foreign investors choose to repatriate funds. Additionally, rapid expansion of Egypt's money supply, growing 29.59% over the year to September, has compounded the strain on the dollar exchange rate, further fueling inflation.

(With inputs from agencies.)