Egypt’s pound has become one of the world’s strongest-performing currencies after a sharp decline in oil prices eased concerns about the country’s economic outlook. The currency had faced pressure following tensions involving Iran, which drove energy costs higher and threatened to increase fiscal strain for Egypt, a major oil importer. However, crude prices have fallen about 15% over four trading sessions amid expectations that a US-Iran agreement to reopen the Strait of Hormuz will boost supply. Egypt’s dollar-denominated bonds have gained more than 3% since the agreement was announced, ranking among the best performers in emerging markets. Furthermore, Citigroup has recommended buying Egyptian local-currency bonds, anticipating relief from oil-driven inflation pressures.
Financial Post