The International Monetary Fund releases a statement on the exchange rate in Egypt

Officials from the International Monetary Fund confirmed that the Central Bank of Egypt is seeking to allow the exchange rate to reflect supply and demand conditions for foreign currency.

International Monetary Fund officials said the fund-supported program with Egypt helps avoid imbalances in demand for the currency in Egypt, provides exchange rate flexibility and withstands external shocks, and encourages more investment.

Representatives of the International Monetary Fund said that when Egypt fixed the exchange rate in recent years, this negatively affected the operation of the market and led to an accumulation of demand for the currency, which led to economic headwinds in 2022.

Fund officials added that Egypt’s central bank can sometimes intervene during periods of excessive exchange rate volatility, without resorting to banks’ net foreign assets, in order to stabilize the exchange rate.

And they went on: the new funding from the International Fund to Egypt will stimulate more foreign investment in Egypt, in addition to selling some of the shares in state-owned companies.

Source: agencies