The Director of the Middle East and Central Asia Department of the International Monetary Fund, Jihad Azour, said that Egypt’s move to raise interest rates is a step in the right direction.
He emphasised that, at a time when the state of the world economy is hurting, the flexible exchange rate will assist shield the Egyptian economy from shocks.
According to Jihad Azour, the Central Bank of Egypt’s actions to raise interest rates last week were the appropriate move since it is crucial to keep inflation under control.
He pointed out that the transition to a flexible exchange rate will help the Egyptian economy protect from trade shocks, as well as external shocks, especially at a time when global financial conditions have become more difficult.
In a statement released on Thursday, the International Monetary Fund said that an agreement had been reached with experts on the Fund’s facilities being extended by $ 3 billion for a period of 46 months. It also added that the flexible exchange rate system was the essential foundation for restoring and safeguarding Egypt’s external flexibility.
The deal, which demonstrates the broad international and regional support for Egypt, is projected to trigger a sizable and multi-year financing package, including around $ 5 billion in the fiscal year ending in June 2023, according to the IMF.
Regarding the assistance from the Gulf states, the director of the IMF’s Middle East and Central Asia Division stated that some Gulf authorities; She has already made data available to support the programme, explaining that the amount is $ 5 billion for the fiscal year is 2022–23; It will also be in addition to extending the deposits of the Gulf states in the Central Bank of Egypt.
We see through these initiatives; Sufficient funding guarantees to meet Egypt’s external financing needs, he said, adding that any actions made by Egypt raise the level of prediction capacity and restore confidence that allow her to cover her financing needs.
Egypt has promised to facilitate the financing of the International Monetary Fund at a value of $ 3 billion, along with an agreement at the employee level, and the Central Bank of Egypt increased interest rates by 200 basis points in a special meeting.
from Cairo 24.
The IMF makes a statement regarding the high cost of the dollar in Egypt.
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