The time and date are stated as 01:34 PM on Thursday, April 13, 2023.
Cairo – Masrawy reports that the International Monetary Fund believes adjusting the exchange rate of the pound against the dollar is crucial for the stability of the Egyptian economy, with reducing inflation to the Central Bank’s set target also being necessary. Tobias Adrian, head of the Monetary and Capital Markets Department at the International Monetary Fund, stated in an interview with Al-Sharq – Bloomberg Saudi Arabia that setting the exchange rate of the pound allows the central bank to implement monetary policies suitable for local conditions. The Central Bank allowed flexibility in the exchange rate of the pound against the dollar at the end of last year as part of the agreement with the International Monetary Fund on a $3 billion loan. The dollar’s exchange rate in official banks surpassed 30 pounds in recent days, compared to the 15-pound level at the beginning of the year. Adrian added that implementing a combination of monetary and fiscal policies is essential to restore stability to Egypt’s economy due to the high rate of inflation in the country. In March, Egypt’s yearly inflation rate reached 33.9%, with cities experiencing 32.7%. The fund official stated that it is essential for the Central Bank of Egypt to reach the inflation target, with more steps required to achieve this. The Central Bank set new inflation rate targets after exceeding the previous ones announced at the end of last year, which were set at 7% (±2%) during the last quarter of 2022.
01:34 PM
Thursday, April 13, 2023
Cairo – Masrawy:
The International Monetary Fund believes that adjusting the exchange rate of the pound against the dollar is a key factor for the stability of the Egyptian economy, while reducing inflation to the target set by the Central Bank is necessary.
Tobias Adrian, head of the Monetary and Capital Markets Department at the International Monetary Fund, said in an interview with Al-Sharq – Bloomberg Saudi Arabia, that adjusting the exchange rate of the pound allows the central bank to implement monetary policies that are favorable to local conditions.
The Central Bank has allowed flexibility in the exchange rate of the pound against the dollar since the end of last year, as one of the terms of the agreement with the International Monetary Fund, on a $3 billion loan.
The exchange rate of the dollar in official banks has exceeded the level of 30 pounds during the current days, compared to the level of 15 pounds at the beginning of the year.
He added, “Given the high rate of inflation in Egypt, it is necessary to implement a combination of monetary and fiscal policies to restore stability to the country’s economy.”
The annual inflation rate in Egypt rose during the month of March, reaching 33.9%, while the annual inflation rate in cities reached 32.7%.
The fund official said that the Central Bank of Egypt “must reach the inflation target in one way or another…and there are still more steps required to achieve that.”
The Central Bank set new targets for the inflation rate after exceeding the targets announced at the end of last year, which were set at 7% (±2%) during the last quarter of 2022.
In conclusion, the International Monetary Fund has emphasized the importance of adjusting the exchange rate of the pound against the dollar for the stability of the Egyptian economy. With the Central Bank allowing flexibility in this area as part of their agreement with the IMF, it is hoped that implementing favorable monetary policies will help to restore stability. However, with the annual inflation rate being so high in Egypt, it is necessary to implement a combination of monetary and fiscal policies to achieve the inflation target set by the Central Bank. It remains to be seen what further steps will be taken to achieve this goal, but it is clear that proactive measures are needed to bring stability to the country’s economy.