Egypt’s FX flexibility, reform strategy boosts shock resilience – CBE chief

Central Bank of Egypt (CBE) Governor Hassan Abdalla said Egypt’s sweeping economic reforms have helped drive down inflation and strengthen the country’s ability to absorb external shocks, as he addressed a regional meeting held at the IMF-World Bank Spring Meetings.
Speaking via video conference at a gathering of central bank governors and finance ministers from the Middle East, North Africa, Afghanistan and Pakistan (MENAP), Abdalla said inflation had fallen to 11 per cent in January 2026 from a peak of 38 per cent, supported by a shift to an inflation-targeting framework and a more flexible exchange rate.
Egypt’s net international reserves climbed to a record of about $53 billion by the end of March, he added, underscoring improved external buffers.
Abdalla said the central bank remains committed to exchange rate flexibility, allowing the Egyptian pound to act as a shock absorber amid heightened geopolitical tensions. The currency has recently recovered around 50 per cent of earlier losses within days, aided by improved foreign currency inflows and easing regional risks.
He warned, however, that ongoing conflicts and global uncertainty continue to weigh on inflation, capital flows, and external balances across the region.
The central bank stands ready to take all necessary measures to ensure inflation expectations remain anchored, Abdalla said, highlighting Egypt’s stronger capacity to weather external shocks compared with previous crises.
He also stressed the importance of international support, particularly from the International Monetary Fund, in providing liquidity to help emerging economies navigate prolonged global disruptions.
The MENAP meeting, held on the sidelines of the spring meetings, focused on the economic impact of geopolitical instability and ways multilateral institutions can better support member countries.
Egypt’s participation reflects its continued engagement with global partners to bolster financial stability and sustain economic growth, the central bank said.

Attribution: Amwal Al Ghad English