Egyptian pound has further to fall

The Egyptian central bank appears to have shifted from keeping the pound pegged to the dollar to allowing a relatively gradual devaluation. We think this process has further to run and the pound could fall by a further 10-15% vs. the dollar over the coming year. Assuming the government reaches an agreement with the IMF, the adjustment should be gradual. But without IMF help, there is the growing risk of a more disorderly devaluation.