IMF Praises Egypt for Mitigating Effects of Economic Challenges through "New Programme"

The International Monetary Fund (IMF) praised the recent measures taken by the Egyptian government to expand social protection, as well as the adoption of a flexible exchange rate, following the devaluation.

Celine Allard, head of Egypt's mission to the International Monetary Fund said in a statement that the effects and consequences of the Russian-Ukrainian war pose challenges to many countries around the world, including Egypt.

Allard said that the fund is working with the Egyptian government to prepare for discussions on the program aimed at supporting the common goals of economic stability and sustainable, job-rich and inclusive growth in the medium term for Egypt.

She added that the Egyptian government has adopted a set of macroeconomic measures and structural policies that contribute to mitigating the effects of these repercussions on the Egyptian economy, protect the most vulnerable groups, and maintain the resilience and prospects for the Egyptian economy in the medium term.

She noted the need to continue to adopt flexible exchange rates in order to absorb external shocks and protect financial margins during this turbulent time. She stressed the need to continue adopting prudent fiscal and monetary policies to maintain macroeconomic stability.

She explained that the Egyptian authorities requested support from the IMF to continue implementing its comprehensive economic programme.

On Tuesday, the Central Bank of Egypt (CBE) surprised the markets by raising interest rates exceptionally by 100 basis points, equivalent to 1%, bringing the overnight deposit and lending rates and the price of the main operation of the central bank to 9.25%, 10.25% and 9.75%. arrangement. The credit and discount rate was also raised by 100 basis points to 9.75%.

As a result, the National Bank of Egypt (NBE) and Banque Misr, the largest governmental banks in Egypt announced the issuance of savings certificates for a period of one year, with a return of 18%, in a move to keep pace with developments in the markets.