Egypt allows pound to appreciate

Pound forwards traded near record lows and the exchange rate slid in the unregulated market in Cairo and Alexandria on Wednesday, defying a surprise move by the central bank to force through a currency appreciation and inject banks with dollars to alleviate a hard-currency shortage.

The suspected bombing of a Russian airliner flying out of the Sharm El Sheikh resort last month has hammered Egyptian markets, leaving bond investors with the biggest losses in emerging markets in November.
There’s "not a chance" the central bank can avoid devaluation, Per Hammarlund, chief emerging-markets strategist at SEB AB in Stockholm, said by e-mail Wednesday. "The central bank simply doesn’t have enough reserves to prop up the pound. It will not be able to hold on for much longer as one of the main foreign-exchange earners, the tourism industry, is taking a big hit."