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Sunday, 17 July 2016

CBE considers four scenarios for future of the EGP -source

CBE considers four scenarios for future of the EGP -source: The Central Bank faces four possible scenarios regarding the EGP, according to an unnamed senior official speaking to Daily News Egypt. The CBE may either attempt to carry on as is defending the EGP; “fixing the [EGP] with a commission to provide currency for some sectors that require the [USD]; allowing for partial fluctuation of the exchange rate;” or allowing for a complete float, according to the source. The source also claims that Amer prefers an unmanaged float, but is constrained by lack of FX reserves to provide required liquidity, and is instead awaiting expected inflows of USD 5.5 bn over the coming months, including USD 2 bn each from Saudi and the UAE as well as loans from the World Bank and the African Development Bank. “The CBE might deliberately be sending mixed signals about the exchange rate throughout the upcoming months with the goal of confusing [USD] speculators,” the source added.

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