IMF stresses need to maintain flexibility of exchange rate in Egypt

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Deputy Director of the Fiscal Affairs Department of the International Monetary Fund, Katherine Baer, stressed the need to maintain the flexibility of the exchange rate in Egypt.

Baer stressed, during a recorded speech that she delivered at the outset of the intellectual forum of the Information and Decision Support Center (IDSC) of the cabinet in Egypt.

The need to maintain the flexibility of the exchange rate in Egypt, while ensuring prudential fiscal and monetary policies and the continuation of structural and governance reforms.

She added that the weak expectations of global economic growth, tightening fiscal policies and rising commodity prices led to an increase in financing needs.

This is especially evident in light of the exit of a large amount of capital from Egypt, following the Ukraine war crisis which requires the development of a set of public policy measures.

Baer Fund stressed the need to maintain macroeconomic stability, ensure the continuity of debt sustainability, protect vulnerable groups and promote private sector growth.

She also pointed out that enhancing revenues and continuous reform of public financial conditions are among the most important policies to reduce public debt: along with the need to support social protection networks according to precise criteria to determine the targeted and eligible groups.

Baer said that the social protection networks for the poor groups help mitigate the impact of the shock resulting from the global increase in food and energy prices.

Baer stated that, in general, policies should aim to support low-income families through social protection networks.

In 2020, the countries of the world witnessed a great disparity in the ability to provide support after the spread of the coronavirus.

Emerging market economies were also more restricted in facing energy and food shocks resulting from the crisis in Ukraine compared to major economies.

Also that the high debt severely limits the ability of fiscal policy to support the economy and leads to higher borrowing costs and scarcity of budget financing resources, which requires the settlement of its balances through exchange rate flexibility, strengthening macroeconomics and maintaining public finance balances.

The post IMF stresses need to maintain flexibility of exchange rate in Egypt appeared first on Egypt Independent.

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