Central Bank decisions contribute to the management of cash for the import of production inputs

Ashraf Hajar, director of the Egypt and Middle East Center for Financial and Economic Studies, said that the centeral bank succeeded in providing foreign cash flows before making the decision to allow the exchange rate to be determined according to market mechanisms, which contributes to providing the foreign exchange necessary for companies to work and produce.

Hajar expected the exchange rate of the dollar against the pound to rise by an average rate before falling again in light of the Central Bank of Egypt's efforts to diversify the state's foreign exchange resources, but he sees the difficulty of predicting the fair rate that the pound can reach against the dollar in light of the entanglement of economic events.

The MPC decided in its extraordinary meeting to raise the overnight deposit and lending rates and the central bank's main operation rate by 600 basis points to reach 27.25%, 28.25% and 27.75%, respectively, and the credit and discount rate by 600 basis points to reach 27.75%.

The announced monetary policy decisions come as part of a comprehensive economic reform package in coordination with the Egyptian government and with the support of bilateral and multilateral partners. In preparation for the implementation of the reform programme, funding has been provided to support foreign exchange liquidity.

The CBE also stresses the importance of coordinating fiscal and monetary policies to reduce the impact of external repercussions on the domestic economy, which puts the Egyptian economy on a sustainable path to maintain macroeconomic stability, ensure debt sustainability and work to build international reserves.