What the analysts and talking heads are saying.
Angus Blair, Chief Operating Officer, Pharos Holding: “There will be relief in the market and with companies that the devaluation has happened. The resetting of Egypt’s economic equation has begun at last, but much more needs to be done by the government to reform the economy.” (Reuters, via Business Insider)
Mohamed Abu Basha, EFG Hermes: “This is a very positive, courageous step on many levels, firstly, the extent of the move, and secondly the fact that it is effective immediately. We are looking at what is very likely the end of the [foreign-exchange] crisis.” (Wall Street Journal)
Jason Tuvey, Capital Economics: “The decision this morning by the Central Bank of Egypt (CBE) to finally adopt a floating exchange rate regime is a positive step and moves the government closer to securing a USD 12 bn financing package from the IMF. There will inevitably be fresh pain for the economy in the near term – inflation is likely to rise further and the CBE hiked interest rates by 300bp today. But, over time, a weaker pound and IMF-backed reforms should lay the foundations for stronger economic growth. … a devaluation could bring substantial benefits in the long-run.” (Emailed research note)
Tariq Qaqish, Al Mal Capital, Dubai: “Before we increase our exposure to Egyptian assets, we want to see that the entire process is seamless. Like getting money into and out of the country.” (Bloomberg)