Despite much anticipation about the approaching date of floating the Egyptian pound, a report by Citigroup expects the decision to be delayed for 60 days. Further reduction in the price of the pound are futile in resolving external imbalances, the report said, pointing out that the near-term benefit of export growth from the depreciation of the currency is questionable. Likewise, the financial authorities in Egypt did not want to move toward a flexible exchange rate because the pound is already undervalued, according to Goldman Sachs. Multiple devaluations over the past year have left the Egyptian pound roughly 25 percent below its “fair value” in the long term on a spot basis, it added. Costa explained that the Central Bank of Egypt will likely wait for tourism revenues of about $14 billion to reflect on the economy before deciding on the need for another repricing of the pound.
