Is Egypt finding its path towards economic recovery?

Days before Ramadan, the Egyptian regime made the bold move to hike interest rates and free-float its currency, causing the value of the Egyptian Pound (EGP) to fall from 30 EGP to the dollar to 49 EGP, effectively wiping out over 60% of its value.

Foreign investors have praised the move, but domestically there are fears about Egyptian assets falling in value, with even more expensive imports and slower economic growth due to the interest hike.

“With the FX close to 50 coupled with the big interest rate hike, enough has been done to restore investor confidence. It’s a much better story from an investor perspective,” Anthony Symond, investment director of emerging market debt at Abrdn, told The New Arab.

On the back of the devaluation and the IMF’s announcement to sign off a new $8 billion facility hours after the price fall, Egypt’s international bonds rallied up to 4 cents. Egypt’s bonds have risen steadily this year in anticipation of the IMF deal, making it one of the best-emerging market performers.