Jihad Azour, Director of the Middle East and Central Asia Department of the International Monetary Fund, confirmed that "Egypt's move to raise interest rates is a step in the right direction," noting that "the application of a flexible exchange rate will help protect Egypt's economy from shocks at a time when global financial conditions are becoming increasingly difficult."
The Egyptian authorities pledged to implement a “permanently flexible” exchange rate in conjunction with a staff-level agreement to facilitate the financing of the International Monetary Fund worth three billion dollars. The central bank also raised interest rates by 200 basis points.
Azour stressed, "The measures taken by the Central Bank to raise interest rates are a step in the right direction. It is very important to control inflation.” He pointed out that "the transition to a flexible exchange rate will help the Egyptian economy to protect against the shocks of the difference between the import and export rate, as well as external shocks, especially at a time when global financial conditions have become more difficult and more challenging."
Refinitiv data showed that the Egyptian pound fell by about 4 percent to 23.8 pounds against the dollar, as trading resumed on Sunday after the authorities pledged to switch to a flexible exchange rate under an agreement to obtain support from the International Monetary Fund.
Source (Emirati Gulf Newspaper, Edited)
