Bloomberg: Egypt's Pound Ranks 2nd Best Currency in 2019

Bloomberg highlighted Egypt's inflation, pointing out that the Egypt's pound had the world's second-best performance against dollar so far.

According to data from the Egyptian statistical agency, the annual inflation rate for May was 14.1%, compared with 13% in April, ie, inflation increased by 1.1%.

Also, Egypt's inflation accelerated over the past month even before the expected interest rate cuts began, reducing the likelihood that the central bank would cut interest rates again in the near future.

Jason Jackson, the senior economist at emerging markets at Capital Economics reported that rising inflation may not lead to an increase in interest rates, but it means that the central bank may refrain from resuming the facilitation cycle, as policymakers will want to monitor the impact.

Noteworthy, inflation in Egypt, Africa’s third-biggest economy, slowed to single digits for the first time since the pound was floated in late 2016. It had rocketed as high as 33%.

Later, Egypt’s administration explained that a devaluation was needed to ease severe shortages of foreign exchange and get a $12 billion loan from the International Monetary Fund.

Although the decision was painful for Egyptians, but portfolio flows into Egypt soared following the devaluation and the start of IMF-supported reforms, which included cutting subsidies that soaked up much of the budget and it got more foreign direct investment last year than anywhere in Africa, according to Bloomberg.