Where do we go from here? EGP at 11.75, devaluation by mid-November and a 200 bps rate hike -Pharos. Radwa El-Swaify, head of research at Pharos Holding, thinks mid-November would be a “perfect time” for devaluation, noting that the central bank has gone beyond the originally implied timeline of mid-October. That, she tells Bloomberg’s Yousef Gamal El-Din (watch, run time: 4:22), has driven the parallel market rate north of EGP 16 to the greenback. “There’s no more room for delays,” El-Swaify says, explaining a mid-November devaluation would be “right before the [Central Bank of Egypt’s Monetary Policy Committee] meets on 17 November, when they should go for a rate hike of around 200 bps. It’s also before a planned IMF executive board meeting to discuss the package for Egypt.” Gamal El-Din noted that 12 month non-deliverable forwards on the EGP are at 13.76, prompting El-Swaify to suggest, “we’re looking at somewhere around 12. That’s where the three-month NDF is now.”

Finally, inflation is the subject of veteran financial writer Patrick Werr’s weekly column on the Egyptian economy for The National. Werr asks whether “the government [will] be able to keep money supply under control once an IMF deal is signed. The problem is the huge deficit, which has forced it to borrow directly from the central bank, or, in other words, essentially to print money.” The M2 money supply is up 18% in 8M2016, he notes, suggesting the Ismail government should “be able to use some of the bns it will receive under the IMF deal to plug the deficit without resorting to money creation” and, in turn, fueling inflation.