The “magic wand” that was the float of the EGP will not make the parallel market disappear entirely at an instant, CBE Governor Tarek Amer told Al Ahram’s economic paper. The banks are in control of the currency market now, he says, and the impact of the parallel market is minimal and tapering out. Amer expects the market to self-adjust in a short period of time. He explained that the continued drop in the FX rate is “normal” as Egypt’s foreign currency revenue sources continue to struggle, but stressed the flotation was the correct course of action, and will help rebuild the country’s reserves.

There will be significant outflows in 2017 as Egypt has to make a number payments throughout the year starting with USD 700 mn as part of the Paris Club debt in January, a USD 1 bn loan repayment to Turkey, as well as making payments to reduce dues owed to international oil companies throughout the year.