Failure to implement deep structural reforms and continue with the IMF program could plunge Egypt back into financial turmoil, The Institute of International Finance (IIF) has warned. The IMF loan package, however, came with conditions that include a shift to a flexible exchange-rate regime, controlling inflation using monetary policy instruments, and structural reforms. Any financial turmoil "will have dire repercussions for the region, as it would destabilize a major political and military power. "The shortfall in foreign exchange that this has created, along with persistent exchange rate mismanagement, has put serious pressure on the pound," IIF said. The reforms are also needed to help catalyse foreign exchange inflows, particularly from the Gulf region (GCC).

Source: The North Africa Journal June 19, 2023 05:25 UTC