Currency traders are betting against Egypt in droves. While the central bank battles valiantly to keep the exchange rate at around 6 to the US dollar in the cash market, the Egyptian pound’s value is plunging in futures trading.
On Monday, the 12-month non-deliverable forward rate hit 7.45, its weakest-ever level, suggesting that traders expect a devaluation of nearly 20 per cent. The finance ministry tried to boost confidence by setting a new date – May 15 – for winning approval for the country’s much-delayed International Monetary Fund assistance. But with Cairo in political crisis, Washington will be in no hurry to ride to the rescue.
The latest futures sell-off comes amid the uncertainty generated by the surprise decision by Egypt’s election commission to bar the candidacies of 10 of the 23 candidates in next month’s presidential election.
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