14 February 2017

Egypt's Economic Transition Could Be 'Coming to a Close', IMF's Lagarde Says

Cairo — Egypt is making good progress in its economic reform program and the recent developments might be an indicator that the transition is coming to a close, IMF Managing Director Christine Lagarde said on Monday.

The IMF executive board approved in November a three-year $12 billion loan to Egypt to support its economic reform programme. The deal involved tough measures including currency floatation, cutting its budget deficit, slashing subsidies and raising taxes.

After abandoning its currency peg of EGP 8.8 to the US dollar on Nov.3, the currency has dropped to as low as EGP 19.5 to the dollar.

When asked if she believes the worse is going to come before the better comes later regarding the economic situation in Egypt, Lagarde said that this is "typically how it works."

"It's difficult. It's a transition that a country goes through when currency is floated and when serious measures are adopted in order to restore the economic sanity and the overall situation of the country," Lagarde said in an interview with Dubai TV.

"Hopefully once that is completed, the transition is done, then the country can bounce back, inflation can come down and the country can again navigate and hopefully prosper with the structural reforms that need to be adopted in order to unleash the huge potential of Egypt and the Egyptian people," she added.

Over the past few days, the pound has started to re-appreciate and was traded at around EGP 17 in banks on Monday.

Lagarde, who said that the IMF expects to complete its first review of the programme around June, expressed her confidence that authorities are doing the best they can under the circumstances, saying that they're seeing good progress and ownerships taken of the reforms by the authorities.

Lagarde added that it's difficult to be certain whether the transition will be completed anytime in 2017, but she expressed her optimism about the situation.

"It's difficult to predict with any degree of certainty but it seems to us that the latest development we have seen in terms of currency appreciation are probably an indicator that the transition is coming to a close," she added.

Egypt

Gunmen Kill Coptic Christians in Bus Attack

The Security Council observed a moment of silence for the victims of the 26 May attack by gunmen on a bus carrying… Read more »

Copyright © 2017 Aswat Masriya. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 900 reports a day from more than 140 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.