The managing director of the International Monetary Fund (IMF), Christine Lagarde, stated during a conference held on Thursday that there is “clearly a question that needs to be addressed, I would say, head-on, and that is inflation.”
She believes that the Egyptian programme that is underway has been very courageous and has led to major reforms for the country; yet, she also believes that other reforms have to continue, but there has to be a special focus on inflation.
“I think that the Central Bank and the Finance Minister of Egypt are both aware and will, I hope, tackle the inflation risk, which is weighing on the population,” she stated.
She said that the $12bn loan programme to Egypt is the second largest financial programme that the IMF is conducting at the moment, adding that it is of critical importance that the Egyptian authorities and the Egyptian people actually endorse the proposals there in order to take the economy forward.
Furthermore, Bloomberg published an article quoting Jihad Azour, director of the fund’s Middle East and Central Asia department, who stated that “available monetary and fiscal policy instruments, including interest rates, can help to contain inflation.”
At a press conference on Friday, Azour said interest rates are “the right instrument” to manage Egypt’s inflation. “This is something that we are discussing with the authorities,” he said, according to Bloomberg.