Currency Performance Forecast for 2023

Currency Forecast in Egypt for the Rest of 2023 The Egyptian pound (EGP) is one of the most important indicators of the country's economic performance and stability. The currency has been facing various challenges and pressures in recent years due to inflation, currency devaluation, interest rate hikes, political instability, COVID-19 pandemic etc However, the currency has also shown some signs of resilience and recovery thanks to several factors such as foreign exchange reserves, foreign direct investment (FDI), tourism recovery, IMF agreement etc What can we expect from the Egyptian pound for the rest of 2023? How will it perform against major currencies such as US dollar (USD), euro (EUR), British pound (GBP) etc? What are the main drivers and risks that will affect its exchange rate? According to Trading Economics, as of March 23rd 2023, the USD/EGP spot exchange rate was 30.92 EGP per USD, while the EUR/EGP spot exchange rate was 33.38 EGP per EUR. The GBP/EGP spot exchange rate was 38 EGP per GBP. According to Useforcast.com , a website that uses resonant artificial intelligence systems to forecast currency pairs ,the weighted average price target for the USD/EGP currency pair as of March 20th 2023 was 31.40 EGP per USD. A positive trend was expected with possible volatility of 0.11%. The optimistic price target was 31.42 EGP per USD , while the pessimistic price target was 31.38 EGP per USD. The weighted average price target for the EUR/EGP currency pair as of March 20th 2023 was 34.24 EGP per EUR . A positive trend was expected with possible volatility of 0.17%. The optimistic price target was 34.28 EGP per EUR , while the pessimistic price target was 34.21 EGP per EUR. The weighted average price target for the GBP/EGP currency pair as of March 20th 2023 was 39 EGP per GBP . A positive trend was expected with possible volatility of 0 . 22% . The optimistic price target was 39 . 04 EGP per GBP , while the pessimistic price target was 38 . 96 EGP per GBP. Some of the main drivers that could support the Egyptian pound for the rest of 2023 are: - Foreign exchange reserves: According to Central Bank of Egypt (CBE) , Egypt's net foreign reserves increased by $1 billion in February , reaching $40 billion . This level covers more than eight months' worth of imports and provides a buffer against external shocks . - Foreign direct investment: According to UNCTAD , Egypt was one of the top FDI recipients in Africa in 2021 , attracting $5 .1 billion despite a global decline due to COVID -19 pandemic . FDI inflows are expected to increase further in 2023 as Egypt implements its economic reforms and attracts more investors . - Tourism recovery: According to Planning Minister Hala Al-Saeed , Egypt's tourism sector witnessed a significant recovery in Q1 FY2022-23 , with tourist arrivals increasing by %55 year-on-year . Tourism revenues are expected to increase further in %23 as COVID -19 restrictions ease and travel demand picks up . - IMF agreement: According to Finance Minister Mohamed Maait , Egypt reached an agreement with IMF on its second review under its $5 .2 billion standby arrangement (SBA) program . The agreement will unlock $1 .6 billion in funding and help Egypt maintain its macroeconomic stability and fiscal discipline . Some of the main risks that could weigh on the Egyptian pound for the rest of %23 are: - Inflation: According to CAPMAS , Egypt's annual urban headline inflation rose to %21 .3% in December %22 from %18 .7% in November %22 due to higher food prices and fuel subsidies cuts . Inflation is expected to remain high in %23 due to supply-side shocks and monetary policy tightening . - Interest rates: According to CBE , Egypt's overnight deposit rate remained unchanged at %14% in February after being raised by %800 basis points during %22 . High interest rates could dampen economic activity and consumer spending while increasing debt servicing costs .