Egypt requests IMF support to overcome Ukraine war spillover

Authorities in Egypt have requested the International Monetary Fund’s (IMF) support to implement a comprehensive economic programme, said an IMF senior official on Wednesday.

Celine Allard, IMF’s mission chief for Egypt, said in a statement that the North African country requested the fund’s support in the light of the “rapidly changing global environment and spillovers related to the war in Ukraine.”

Such circumstances are posing “important challenges for countries around the world, including Egypt.” Allard added.

“A set of macroeconomic and structural policy measures would mitigate the impact of this shock on the Egyptian economy, protect the vulnerable, and preserve Egypt’s resilience and medium-term growth prospects.” the IMF official explained.

Allard commended Egypt’s recent actions to expand targeted social protection and implement exchange rate flexibility, describing them as “welcome steps.”

“Continued exchange rate flexibility will be essential to absorb external shocks and safeguard financial buffers during this uncertain time. Prudent fiscal and monetary policies will also be needed to preserve macroeconomic stability.” she said.

The IMF staff is working closely with the Egyptian authorities to prepare for programme discussions with a view to supporting “shared goals of “economic stability and sustainable, job-rich, and inclusive medium-term growth for Egypt.”

Earlier this week, the central Bank of Egypt convened unscheduled monetary policy meeting to hike key interest rates by 100 points, and devalued the pound by more than 14 percent against the U.S. dollar.