Egypt's pound set to sag

Egypt's pound will depreciate steadily against the dollar over the next 12 months, undermined by political and economic problems for the foreseeable future, a Reuters poll indicated on Wednesday.

A poll on African currencies suggested the pound will weaken to around 7.08 per dollar by this time next year, from current levels at 6.8177.

The pound has lost almost 13 percent of its value in the past 12 months.

“It is a reflection of the weakness in the balance of payments, in light of the difficult political situation and economic situation,” said Reinhard Cluse, chief economist for Europe and CEEMEA at UBS.

“Egypt faces great difficulty in attracting the required capital from the current account deficit. That means they face an ongoing loss in foreign exchange reserves.”

Egypt aims to boost its foreign currency reserves to $16 billion by the end of June, offering a lower target than the government had previously announced.