Supervisor Elham AbolFateh
Editor in Chief Mohamed Wadie

IMF Expects Egyptian Pound to Reach EGP 36.8 against Dollar during 2024/28

Sun 07 Jan 2024 | 09:19 PM
Taarek Refaat

The Egyptian Cabinet announced that work is underway to continue adopting a flexible exchange rate policy, in order to enhance the flexibility of the Egyptian economy in the face of shocks, in parallel with the improvement in foreign exchange earnings.

The report issued by the Cabinet stated that this policy will work to cover the gap between the official exchange rate and the parallel market within a specific period of time, and according to International Monetary Fund (IMF) estimates, the exchange rate of the pound against the dollar will reach 36.8 pounds on average during the period 2024/28.

This comes in light of the expectation that the current account deficit will contain a deficit of 2.6% of GDP on average annually during that period.

The state is also interested in reducing the levels of exposure of Egyptian banks to borrowing from abroad in accordance with the application of micro- and macroprudential policy tools, and harmonizing the maturity dates of assets and liabilities in foreign currency to achieve financial stability.

Macroprudential tools are policies designed to mitigate systemic risks that could arise from excessive lending, asset price bubbles or financial vulnerabilities.

Also, in the short and medium term, the government aims to use all monetary policy tools to reduce inflationary pressures and move towards reducing inflation rates to single digits by the end of 2025.