The Central Bank of Egypt’s (CBE) decision to hike interest rates by 100bp, to 9.25%, and devalue the pound by 10% against the dollar suggests that policymakers have finally woken up to the worsening external position. The move could pave the way for a fresh IMF deal, but the key thing to watch is whether today’s move marks a one-off devaluation or officials now allow the pound to move more freely.
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