Egypt has requested assistance from the International Monetary Fund to develop a comprehensive economic plan, the IMF announced on Wednesday.
It added in a statement that continued exchange rate flexibility will be necessary to withstand external shocks.
According to the IMF, it is working closely with Egyptian authorities to prepare for negotiations in order to support long-term, job-rich, and inclusive growth.
An Egyptian Cabinet spokesperson indicated in a second statement that the new package could include additional IMF funds.
Following Russia’s invasion of Ukraine, which forced international investors to evacuate emerging markets, Egypt is facing unprecedented economic pressures.
The Egyptian government allowed the pound to drop by 14% on Monday, as it had remained unchanged since November 2020. The currency rose marginally to 18.32 pounds to the dollar on Wednesday.
Russia and Ukraine were the primary wheat suppliers to Egypt, which is generally the world’s top buyer and a significant tourist destination.
‘The quickly changing global environment, as well as spillovers from the Ukraine conflict provide significant challenges for nations around the world, including Egypt,’ IMF added in their statement.
‘During this uncertain period, continued exchange rate flexibility will be necessary to absorb foreign shocks and protect financial buffers. To maintain macroeconomic stability, prudent fiscal and monetary measures will be required.’
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