Egypt’s improved competitiveness is unlikely to be negatively affected by an expected appreciation of the EGP’s real effective exchange rate (REER) in the short term, the central bank says in its monetary policy report, according to Bloomberg’s Ahmed Feteha. The expected appreciation in the REER will not "neutralize the substantial real depreciation" that took place in November and December. The country has been realizing the benefits of the float and inflationary pressure is subsiding, the report says.

Despite driving up inflation rates, the weaker EGP is also encouraging slow but steady growth in trade and tourism, Saxo Bank head of macro analysis Christopher Dembik said yesterday, Al Masry Al Youm reports. The float was an unavoidable step in the country’s economic reform process and the government should continue cutting red tape and bureaucracy to attract more investment, according to Dembik. He also noted that “Trump risk” is real, but there are other, more important factors Egyptian investors must consider, including the fact that the US president will likely be unable to follow through on many of his controversial promises.