Egypt’s economy comes back into the spotlight

After a prolonged period of exchange rate stability, the Central Bank of Egypt (CBE) loosened its grip on the pound this month, and the currency has since fallen by 3.5% against the US dollar. The CBE has been characteristically opaque about its intentions. But we think it’s an encouraging step for two reasons. First, it should provide a boost to Egypt’s export competitiveness. And second, it’s a tentative sign of a move towards more orthodox policymaking. This, coming alongside a rebound in growth, may support a pick-up in much-needed investment.