The Executive Board of the International Monetary Fund (IMF) approved a 46-month $3bn arrangement under the Extended Fund Facility (EFF) for Egypt. While economic recovery gained momentum in 2021, imbalances also started building amidst a stable exchange rate, high public debt and delayed structural reforms. Russia’s war in Ukraine crystallized these pre-existing vulnerabilities, triggering capital outflows, and, in the context of a still-stabilized exchange rate, reduced the central bank’s foreign reserves and banks’ net foreign assets and widened the exchange rate misalignment,” said Kristalina Georgieva, IMF Managing Director. A permanent shift to a flexible exchange rate regime will help mitigate external shocks and prevent imbalances from re-emerging and allow monetary policy to focus on maintaining price stability. Their strong ownership and track record under previous Fund-supported programs and political support for the policy package are important risk-mitigating factors to achieving the objectives of the Fund-supported program.”

Source: Daily News Egypt December 17, 2022 03:30 UTC