Tuesday, Jun 18, 2013
1018 GMT [Zawya Dow Jones]--Egypt's currency is expected to devalue further by the end of year to reach 7.5 Egyptian pounds to the U.S. dollar, Capital Economics says. "And there is a growing risk that, without an IMF deal, the currency falls further." Says until the end of last year, the central bank had intervened in the forex market to prevent the currency from depreciating, but this caused FX reserves to fall by 60%. Reckons an acceleration of capital flight since due to political unrest further reduced the CBE's firepower, forcing it to loosen its grip on the currency. The pound has since fallen by 13% against the dollar. Notes over the past couple of weeks the currency has remained stubbornly above 7/U.S. dollar, likely due to CBE intervention with the aid of recent Libya and Qatar deposits. Reckons the pound will break through this level sooner rather than later.
(reem.abdellatif@dowjones.com; Twitter: @ZDJnews)
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(END) Dow Jones Newswires
18-06-13 1028GMT
