Egypt faces the risk of renewed capital flight out of the country once the banking sector reopens in what would present further strains to its financial system, analysts have warned.
The closure of the domestic stock market and banking sector last week has temporarily halted the outflow of capital, but not before the bourse plunged 20 per cent and an estimated $1.5bn of foreign money placed in Treasury bills left the country, according to one senior analyst in Cairo.
This caused the exchange rate to the dollar to drop by almost 1 per cent over the past week to a fresh six-year low of E£5.85, with the fall moderated by discreet central bank intervention, some analysts said.
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