Happy Float-a-versary: We’d like to take a moment to remind everyone that tomorrow is the one-year anniversary of the EGP float — or the turning point in Egypt’s economic recovery. On the morning of 3 November last year, the Central Bank of Egypt moved “with immediate effect, to a liberalised exchange rate regime to quell any distortions in the domestic foreign currency market … [to] allow market demand and supply dynamics to work effectively in order to create an environment of reliable and sustainable provision of foreign currency.” In a stroke, the EGP went from being the fourth most-expensive currency in global emerging markets to the third cheapest. The move was critical to securing Egypt’s USD 12 bn IMF loan. From the rally in the carry trade to improving tourism and spiraling inflation, 2017 has been the post-float year. We’ll leave you with last year’s special issue on the EGP float and our extensive interview shortly after with CBE Governor Tarek Amer, our Newsmaker of the Year for 2016.

As we noted yesterday, CBE Governor Tarek Amer marked the occasion by giving his take on how the float has helped the economy. A move to a complete float of the EGP will help the economy withstand future shocks, said Amer at a gathering organized by the Canadian-Egyptian Business Council. He expects that the EGP will appreciate and continue to do so as foreign direct investment increases. The banking sector had managed to draw in some USD 80 bn as a result of the move, he added.

Tunisia is one year behind Egypt: Tunisia has asked banks to stop giving credit to importers of non-essential goods, Jihen Laghmari and Lin Noueihed write for Bloomberg. The limits are designed to curb a growing budget deficit and a decline in FX reserves. “The move mirrors import restrictions imposed in nearby Egypt as it struggled with acute foreign-currency shortages that virtually paralyzed trade and investment before the central bank floated the pound in November. Foreign reserves in Egypt have recovered since most capital restrictions were removed last year,” despite the drop in the EGP’s value and the rise in inflation. The Tunisian dinar is loosely pegged to a basket of currencies.

Fed leaves interest rates on hold: The Federal Reserve kept interest rates unchanged on Wednesday on the back of a solid US economic growth and a strengthening labor market. “The labor market has continued to strengthen and … economic activity has been rising at a solid rate despite hurricane-related disruptions,” the Federal Open Market Committee said in a statement after its unanimous policy decision. The Fed did acknowledge, however, that inflation remained soft but did not downgrade their assessment of pricing expectations.

(Closer to home: The Central Bank of Egypt’s Monetary Policy Committee meets two weeks from today on 16 November. We don’t expect an interest rate cut until its 28 December meeting at the earliest.)

This comes as US President Donald Trump plans to nominate Jerome Powell, a sitting Fed governor since 2012, as chair of the US Federal Reserve, replacing Janet Yellen. The former Carlyle Group managing director and ex-Treasury undersecretary reportedly favors a gradual increase in interest rates while supporting Trump’s move towards deregulation. Bloomberg, the Wall Street Journal and the Financial Times are all out with pieces claiming Powell will be The Donald’s nominee.

And speaking of Amreeka, could expanded US sanctions on Russia impact Egypt’s oil and gas industry? The US Treasury Department’s Office of Foreign Asset Control (OFAC) published yesterday “an amendment to sanctions against exploration or production for deepwater, Arctic offshore, or shale projects implemented by Russian companies, including abroad,” Reuters reports. Among the triggers is a Russian oil company breaking the 33% ownership barrier, the newswire notes. Where is Russia involved in deep water work? Look no further than Egypt, where Rosneft recently closed its acquisition of a 30% stake in the Zohr supergiant field and is believed to be in the market for an additional 5% share. Russia has recently been accused of using Rosneft as a foreign policy tool. (Shocking that any nation state would do so, no?) The OFAC regs are here (pdf) for those who want to have a look.