The falls in the Egyptian pound over the past year have increased the size of commercial banks’ net FX assets, but what has flown under the radar is banks’ growing exposure to the government’s FX debt. So long as the authorities get the IMF deal back on track, this is unlikely to result in major problems. But the risk now is that a disorderly currency adjustment that makes it difficult for the sovereign to pay its debts could have spillover effects to the banking sector.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services