IN THEIR OWN WORDS- Credit Suisse claims the central bank is “quite closely” managing the EGP. Asked during an appearance yesterday on Bloomberg’s morning show whether high oil prices mean the EGP could come under pressure, Credit Suisse’s head of Middle East research Fahd Iqbal said: “It must definitely be coming under pressure. We’re seeing that across the emerging markets space. But it is quite closely managed. There is, I think, a great deal of concern in Egypt that there would be a currency weakness coming around. We feel the currency would actually be stabilized as we head into year-end because there’s been such a great negative impact [from] devaluation already. We think further devaluation would weigh considerably on the population, which has already suffered from, you know, in some cases a tripling of the cost of basic necessities.

“…Once you have a small devaluation, it really would open the doors for a much more concerted speculative attack against the EGP. If such a small devaluation could occur, there’s obviously more room for more to go through. And it might actually work against the central bank’s best interest if that were to be allowed. So we think it would actually serve Egypt’s interests a lot better to maintain stability and to withstand the impact of further weakness. And given that we have that central bank mechanism, which acts as a buffer, then you already have useful mechanism in place to support the EGP.” Watch for yourself (runtime: 4:01); the Egypt segment starts at about 2:30.