Cairo – Mubasher: Capital Economics said the Central Bank of Egypt's (CBE) decision of finally adopting a floating exchange rate regime is a positive step.

The step will move the government closer to securing a $12 billion financing package from the International Monetary Fund (IMF).

Capital Economics noted that "there will inevitably be fresh pain for the economy in the near term – inflation is likely to rise further and the CBE hiked interest rates by 300 [basis points on Thursday]".

"However, over time, a weaker pound and IMF-backed reforms should lay the foundations for stronger economic growth," the research firm concluded in its report.