In a report issued on Wednesday, EFG-Hermes (HRHO.CA) has downgraded its forecast for the official USD-EGP exchange rate to EGP EGP 7.75 by the coming June. EFG-Hermes moved to a six-month target given the limit longer term visibility at the current juncture due to the ensuing political rift in Egypt, limited visibility on the potential International Monetary Fund (IMF)’s deal and the country’s foreign reserves standing at a decade low.
“We also acknowledge the persistence of a parallel market for the USD over the same period, with rates hovering some 3-5% above official rate. With the political situation in Egypt remaining very fluid, we believe there are notable risks to our macro forecasts on both the upside and downside,” the investment bank said.
