Egypt: IMF agreement and currency devaluation reduce risk of crisis

  • The CBE hiked its policy rate by 200bps and devalued the EGP by 13.75% today, and the IMF announced a US$3bn EFF

  • Deval likely enough to clear market but TBD if CBE will stay committed to flexibility moving forward, which is essential

  • Risk of crisis reduced for now; retain Buy on eurobonds and upgrade from Sell to Buy on 12m T-bills hedged with 12m NDFs

October 27th, 2022
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