Arab Finance: Egypt scores 165 on Namura’s Damocles Index, putting the country’s economy at high risk of a currency crisis after its score exceeded the threshold of 100, according to a recent report by the Japanese bank.

Nomura has warned that seven countries, including Egypt, are currently at risk of a currency crisis with Damocles scores above 100.

The seven countries are Egypt, Romania, Sri Lanka, Turkey, the Czech Republic, Pakistan, and Hungary.

A Damocles index score of over 100 indicates an economy is vulnerable to an exchange rate crisis in the next 12 months.

As per the report, Nomura suggests that Egypt is the most vulnerable emerging market (EM) to a country crisis over the upcoming 12 months, after topping the 32 EM countries.

“The sum of the Damocles scores for the 32 EM countries has increased sharply to 2,234 from 1,744 in our last May 2022 update,” the report added.

“This is the highest aggregate score since July 1999 and is not too far from the peak of 2,692 during the height of the Asian crisis, an ominous warning sign of the growing broad-based risk in EM currencies,” it noted.