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The Egyptian pound hit a new low of around £30 against the US dollar on Wednesday (11 Jan) as the central bank moved to a more flexible exchange rate under the terms of the IMF’s monetary assistance package.
The IMF Mission Chief for Egypt reaffirmed the IMF’s commitment to supporting Cairo’s efforts to reform its economy and curb inflation.
Ivanna Vladkova Hollar speaks at a press conference in Washington, DC (USA).
“Exchange rate and monetary policy will focus on a permanent transition to a flexible exchange rate regime that will help absorb external shocks and rebuild reserves while gradually reducing inflation,” she said. claimed.
“Continued fiscal discipline and fiscal structural policies will strengthen the budget process, increase transparency, and improve budget composition to enable greater social spending, while maintaining market confidence and increasing debt-to-debt balance. The aim is to ensure a downward trajectory for GDP ratios.”
In December, the International Monetary Fund approved a $3 billion loan to Egypt in exchange for a number of economic reforms.
A 46-month loan package will enable an additional $14 billion in loans to Egypt.
Most of Egypt’s population of over 104 million has been affected by rising prices.
The country’s statistics office said on Tuesday that Egypt continues to battle surging inflation even as its currency has fallen dramatically.
The state-run Central Mobilization Statistics Bureau released figures showing annual inflation ballooned to 21.9% last month.
Rising inflation is putting a heavy strain on consumers, especially low-income households. Nearly 30% of her Egyptians live in poverty, according to official statistics.
The economy has also been hit hard by the coronavirus pandemic and the fallout from the war in Ukraine. Egypt is the world’s largest importer of wheat, and most of its imports have traditionally come from Eastern Europe.
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