Cairo - Mubasher: The past month has bought mounting speculation about currency devaluation
in the region’s two largest economies, Egypt and Saudi Arabia, said a recent report compiled by Capital Economics .

In Egypt, Capital Economics thinks there’s some justification for this speculation, as the government appears to be pushing for foreign currency controls to be lifted.

Meanwhile, the recent appointment of Tarek Amer as Central Bank of Egypt governor suggests that the country might be about to shift to a more flexible exchange rate regime, which would inevitably entail a weaker pound.  

Egypt’s economy remains sluggish and the recent Russian plane crash in the Sinai Peninsula is likely to deal a blow to the key tourism sector, which had been one of the few parts of the economy performing well, pointed out the report.