Prime Minister Mostafa Madbouly announced that the Egyptian pound could see a fluctuation of 4% or 5% in the near future.

S&P Global Market Intelligence expects Egypt to devalue its local currency to EGP 40 per USD within the next few weeks, before gradually reducing it to EGP 45 per USD within the next five to six months.

JP Morgan expects a further devaluation of the Egyptian pound, which could range between EGP 45 and EGP 50 against the US dollar.

Any further devaluation of the EGP under the targeted foreign exchange regime is unlikely to meet the policy objectives of the Egyptian government, Goldman Sachs said in a recent report.

Strategists at Deutsche Bank forecast a 20% devaluation to the Egyptian pound in the short term.

Capital Economics said that it is certain that the increase in the size of Egypt's $3 billion from the International Monetary Fund (IMF) will be accompanied by a devaluation of the Egyptian pound, Al Arabiya reported.

The Central Bank of Egypt (CBE) is forecasted to hike policy rates by 200 to 300 basis points (bps) in the first quarter (Q1) of 2024, accompanied by a change in the exchange rates, Mohamed Abdel Majeed, Middle East and North Africa economist at BNP Paribas, said.

The UK-based bank HSBC expected a further devaluation of the Egyptian pound during the first quarter (Q1) of 2024, which could range between EGP 40 and EGP 45 against the US dollar.

Capital Economics projects a 23% drop in the exchange rate of the Egyptian pound to reach EGP 40 against the US dollar during the upcoming monetary policy meetings of the Central Bank of Egypt (CBE).

Standard Chartered Bank is still expecting a fourth devaluation, possibly the last, of the Egyptian pound, according to MENA economist at Standard Chartered Carla Slim.

Japan-based Mitsubishi UFJ Financial Group (MUFG) is anticipating a further devaluation of the Egyptian pound soon amid the current shortage of foreign currency.

S&P Global Ratings is projecting a further devaluation of the Egyptian pound to be traded at 37 per US dollar by the end of 2023.

The Central Bank of Egypt (CBE) would likely put off any pick-up in interest rates and wait out inflation to rise until it has adequate foreign-currency reserves to handle another currency devaluation.

“This summer season can be an important short-term stabilizer until we start getting serious reviews again in September and October,” said Costa, who is also the head of strategy in central & eastern Europe, Middle East and Africa.

Another sharp devaluation of the pound before the end of fiscal year (FY) 2022/2023 could hinder the government’s target to achieve a 6.5% budget deficit of gross domestic product (GDP) as well as stabilization of the country’s debt-to-GDP ratio, Citigroup’s London-based Head of CEEMEA strategy Luis Costa highlighted.

The London-listed securities of Commercial International Bank (CIB) are indicating expectations of another devaluation of the Egyptian pound, Bloomberg reported on April 12th.

HSBC indicated that the decline in the exchange rate of the pound would add additional burdens to the already high prices, and may raise the inflation rate above 40% during the coming months.

“The lack of decisively hawkish action by the central bank of Egypt raises questions around the credibility of its commitment to deliver in accordance with its inflation-targeting mandate,” the strategists wrote. “Real interest rates remain negative both on a backward- and forward-looking basis.”