- According to Citigroup Egypt is expected to postpone the devaluation of its currency until September or later. This decision is influenced by the potential increase in tourism revenue and the sale of state assets, which are expected to alleviate economic pressure. .
- Improved government efforts to privatize state-held firms and the anticipated recovery of Egypt's tourism industry have led to a positive shift in sentiment. This has eased foreign-currency concerns and investor worries about debt restructuring, prompting Citigroup to view the Egyptian pound and dollar bonds more favorably in the short term.
Why it matters
Citigroup expects Egypt's currency to weaken against the dollar, reaching around 36 by end-December and 37 next year. The country needs more foreign financing to clear a backlog of foreign-currency requests, but promised funding from Gulf Arab nations has not yet materialized. Egyptian officials assure that there will be no default and more state assets will be sold. Efforts are underway to improve the investment climate and encourage private-sector participation.