Exchange rate flexibility is important for Egypt: IMF

The International Monetary Fund said on Friday that exchange rate flexibility is important for Egypt.

“In the past, a heavily managed exchange rate has not served Egypt well. It has led to periods of building imbalances, which in turn, have led to the loss of central and commercial bank foreign currency assets, rationing of foreign currency, forcing the central bank to abruptly devalue the Egyptian pound relative to other currencies,” the IMF said in a statement.

These devaluations have led to spikes in inflation and undermined economic activity as consumers and investors lose confidence in the health of the Egyptian economy.