Homework

Egyptian pound has gone through some volatility since it was floated in November 2016 until today.This could be broken down in 4 main phases as follows:

Phase 1: From floatation till June 2018

Phase 2: From June 2018 - December 2018

Phase 3: From January 2019 - February 2020

Phase 4: Coronavirus worldwide outbreak

Required:

1-Analyze what happened during each of the above 4 phases and explain in full details how these factors impacted the EGP exchange rate versus the Dollar.Your paper should cover, but not limited to the following points:

What made the EGP appreciate / depreciate.Your analysis should be based on how the BOP components impacted the exchange rate.

What actions (if any) were taken by the Central Bank of Egypt in response to these market changes.What was the intended outcome which made CBE take such actions?

What major actions related to interest rates on EGP saving instruments were taken by the largest public sector banks (National Bank of Egypt and Banque Misr).Why do you think these actions were taken?

2-What do you think will happen to the EGP exchange rate against the Dollar by end of 2020? (EGP will appreciate / Depreciate or remain the same at the current level of US$ / EGP 15.7).Justify your expectation based on the BOP components analysis.

Hints:

1-Two important sources that you can use are on CBE website:

External position of Egyptian economy report

Monthly statistical bulletin - External sector data

They will avail to you a lot of sliced data that can help you make a thorough analysis.

2-You can also find some useful information in the IMF report on Egypt.I will post the first one that was issued post flotation and the last one available.

3-You will find some good data in economic reports issued by major investment banks like EFG Hermes, Beltone, Enterprise daily bulletin .... etc.

4-You can also use TV interviews for CBE Governor or any of the local banks Chairmen

More refrences are needed for phases 3 &4 but for the rest these references

Might help:

For the IMF reports, the data is up to page 16.The rest are tables, you or might not need them.

CBE data that is mentioned in the paper can be found on theirwebsitecbe.org.eg

: Bloomberg article - Egypt interest rates 28 March 2018.pdf(435.862 KB)

BNP report on Egypt - August 2017.pdf(1.03 MB)

EFG - Egypt macro analysis Sept 2017.pdf(3.731 MB)

Egypt Economic Update - 14.02.2017 EFG Hermes.pdf(3.76 MB)

Goldman Sachs report - Going Dutch.pdf(807.274 KB)

HSBC on Egypt 2 March 2017.pdf(334.142 KB)

IMF Egypt report - October 2019.pdf(1.05 MB)

IMF Egypt review report - 26 Sept 2017.pdf(1.341 MB)