Egyptian pound continues sliding

Egypt's pound fell for a second day following the government's devaluation in the previous week, with the country's finance minister having said the country would ask the International Monetary Fund to approve its $12bn loan request in the next day or two.

As of 1411 GMT, the US dollar had strengthened 7.52% to 16.53 Egyptian pounds, but was off an intra-day high of 16.8997, according to Bloomberg data.

In parallel, Cairo's EGX 30 equity benchmark closed 5.38% higher on Monday at 9,852.69, near a two-year high of 9,965.43 set on 5 February 2015.

During the previous week, the exchange rate on the black market had risen above 18 with the economy continuing to face a dearth of hard currency as tourism and foreign investment dried up following the ouster of Hosni Mubarak.

Against that backdrop, on 3 November the central bank decreed a devaluation in the country's currency, setting a holding exchange rate of 13 pounds per US dollar, versus the official pre-devaluation rate of 8.8 pounds, while hiking its main interest rate by 300 basis points.

IMF staff expected the devaluation would help improve the availability of foreign exchange, boost the country's competitiveness and lead to an influx of investment from abroad.

By mid-September 2016, Egypt's FX reserves had fallen to the equivalent of about three months' of imports.

"More importantly, we have long argued that Egypt has reached a point at which its post-revolution imbalances are so deep and so damaging to its economic prospects that it has little option but to give up on its rigid FX regime, with markedly higher inflation in the near term a necessary price to pay for any prospect of a pick-up in growth, exports, investment and employment over the longer term," analysts at HSBC said in a research note sent to clients on 4 November.

The government also announced an increase of as much as 47% in fuel prices, effective 4 November.

On a related note, on 6 November Egyptian oil minister Tarek El-Molla said Saudi Arabia's state oil company had halted its shipments of oil products to the country indefinitely.

Earlier in 2016, Saudi Arabia had agreed to supply Egypt with 700,000 metric tons of refined products per month over five years.