Egypt’s Central Bank is set to allow new currency derivatives to unlock liquidity in the local market. This will make available instruments to hedge against risks to the pound after it dropped a lot.
Under the plan, domestic lenders would introduce onshore non-deliverable forwards, or NDF contracts, and options that allow companies and investors for the first time to bet on or hedge against swings in the Egyptian currency, according to people with direct knowledge of the matter.
The goal is to build a more transparent local market with the credibility to guide expectations on currency movements.
Source: bnnbloomberg.ca