The Trials of the Egyptian Pound

The EGP will likely rebound in the long run, but its recovery will be slow given pent-up demand for USD, writes Brenden Meighen for the Carnegie Endowment for International Peace. Meighan sees the rebound as conditional on domestic businesses being able to ramp up production import substitutes while lower relative cost of production attracts new investment in export-oriented businesses. While the prospects for Egypt’s long-term economic growth are promising, there are downside risks including the US Fed tightening monetary policy, he says, and a stubborn backlog of companies waiting for USD.