Egypt’s pound reached a new low of about 30 pounds to the US Dollar as on January 11 as the central bank moved to a more flexible exchange rate under the terms of an IMF financial support package
Egypt’s pound reached a new low of about 30 pounds to US Dollar as on January 11 as the central bank moved to a more flexible exchange rate under the terms of an IMF financial support package
The IMF Mission Chief for Egypt Ivanna Vladkova Hollar reaffirmed her organization’s resolve to help Egypt to tame inflation. This assurance she had given while addressing the press in Washington, DC (USA). According to her, Egypt should opt for a flexible exchange rate regime to help absorb external shocks and rebuild reserves while gradually reducing inflation. The country also should focus on the downward debt-to- GDP ratio, she asserted.
The International Monetary Fund (IMF) approved a US$3 billion loan for Egypt to help the northern African country to carry out critical reforms. The tenure of the loan is for 46-months. But, if the country carries out the economic reform packages in accordance with the directions given by the IMF, it can avail another US$14 billion for financing its development projects.
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Egypt has suffered the most by the recent developments, such as the disruption of the supplies of foodstuff, which it mostly imported from Russia and Ukraine. Egypt is one of the world’s largest wheat-consuming nations, with a population of 104 million. Over 30% of its population lives below the poverty line.
The higher inflation, at 21.,9% as of last month, has inflicted heavy burdens on consumers, especially lower-income households. Nearly 30% of Egyptians live in poverty and they are the people who are hard hit, compounded by the outbreak Covid-19 pandemic.
