(Bloomberg) -- Millennium Management, one of the world’s biggest hedge funds, made tens of millions of dollars when Egypt allowed its currency to weaken after a successful bet by one of its senior traders, people familiar with the matter said. 

Naveen Choppara, who joined Millennium in Dubai last year, wagered that Egypt would allow the devaluation in order to stave off an economic crisis, according to the people, who requested anonymity as the details aren’t public. When the pound tumbled 38% on March 6 after the country’s central bank introduced a record interest-rate hike, he made a profit of about $40 million, some of the people said. 

A former top trader at Goldman Sachs Group Inc., Choppara made the bet on the North African nation through derivatives called non-deliverable forwards, or NDFs, which are agreements to buy or sell currencies at a set price and date, the people said. The trade may have been costly to assemble, which might have reduced his overall profit, some of the people said. 

Choppara and a spokesperson for Millennium declined to comment. 

The wager shows how international investors have speculated on the future of Egypt, a regional linchpin home to 105 million people that has been on the brink of economic disaster. The country, one of the biggest global buyers of wheat, has been buffeted by surging commodity prices since Russia’s invasion of Ukraine while Israel’s war with Hamas in neighboring Gaza has further exacerbated economic pressures and contributed to its worst foreign-exchange crisis in decades. 

Following the currency move, Egypt and the International Monetary Fund announced a deal to more than double the country’s rescue program to $8 billion. Efforts to unlock the long-expected IMF loan and the economic reforms were accelerated by the United Arab Emirates, via Abu Dhabi wealth fund ADQ, agreeing to invest $35 billion in the country.

Choppara favored NDFs that locked in the right to receive US dollars in exchange for a certain number of pounds over a period of months, the people said. When the devaluation occurred, he would have profited from the difference between the new, far weaker spot rate for the Egyptian currency and the prices agreed in his NDF contracts. 

Choppara joined Goldman Sachs in London in 2012 and rose to become a senior trader in emerging-market rates and foreign exchange. He often made about $50 million in annual profit for the Wall Street bank by trading the Egyptian pound as well as the Nigerian naira, the people said. 

A spokesperson for Goldman Sachs declined to comment. 

Millennium, the $62-billion hedge fund founded by Izzy Englander, hired Choppara last year as part of the hedge fund’s plans to expand its emerging markets operations in Dubai.

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