Businesses in Egypt are seeing good signals following the float of the EGP, Ahmed Feteha (who, you may recall, never writes anything nice about Egypt) writes for Bloomberg. Importers are able, to some degree, to source USD from banks now and the stock market has gained 19% since the central bank’s decision. “So far we’re on the right track, flows are starting to gain momentum … We’re coming from a very low base so it’s not sizable yet. But this is a change in trend, and we’re seeing all the good signals on many levels,” EFG Hermes economist Mohamed Abu Basha says. “Exchange-rate and fiscal adjustments have to deliver rebalancing for six years of economic dislocation and policy mistakes,” Simon Williams, HSBC’s chief economist for central and eastern Europe, the Middle East and North Africa, says. Williams says that while Egypt has a tough task ahead, “it’s imperative policy makers follow through.”

… On the FX market yesterday, one banker told Reuters the volumes of USD inflows to banks “are increasing, relatively speaking, compared to when there was central bank interference… The number of transactions we are executing with clients is increasing daily. All these are good signs, regardless of the weakening pound. This is the only way to attract [USD] back into the banking system." One trader does not think the parallel market will re-emerge: “I don’t think people will jump right back to the black market because the banks are trying to get the liquidity from the black market as well.”