IMF Says Egyptian Pound at ‘Genuine Equilibrium’ After Float

Egypt has created a “well-functioning" currency market that is reflected in the pound’s current rate, the International Monetary Fund said, adding that the currency may strengthen after a period of “overshooting” since last year’s float.

The pound is trading at a “genuine equilibrium exchange rate, in the sense that as many people want to sell foreign exchange as buy foreign exchange," said Chris Jarvis, the IMF’s mission chief to Egypt, after the fund released details of the $12 billion loan approved last year -- its largest in the region. While the pound is weaker than the fund predicted, it may recover after the initial period of post-float trading, Jarvis said. “That’s our current expectation,” he said.