Events in Egypt yesterday, including a large interest rate hike and comments that a disbursement of more IMF funding is close, suggest that a shift towards more orthodox policy is nearing. If a new, enhanced IMF deal is agreed, that will almost certainly result in a large devaluation of the pound, probably to 65/$, and a move to a flexible exchange rate. The central bank would deliver even more monetary tightening.
EM Drop-In: We'll be discussing EM policy easing, debt risks and the outlook for bond yields in our monthly EM drop-in on Thursday 8th February. Register here.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services