Egypt requests IMF support as economy buffeted by Ukraine spillover

Egypt has requested the International Monetary Fund’s support to implement a comprehensive economic program, the IMF said on Wednesday, adding that continued exchange rate flexibility would be essential to absorb external shocks.

The IMF is working closely with Egyptian authorities to prepare for discussion of the program, with a view to supporting sustainable, job-rich and inclusive growth, it added.

Egypt has faced new economic pressure linked to Russia’s invasion of Ukraine, which prompted foreign investors to flee emerging markets.

On Monday, Egypt let its currency depreciate sharply after it had remained mostly steady for several years.

Russia and Ukraine were the main exporters of wheat to Egypt – typically the world’s top importer – and major sources of tourism.

“The rapidly changing global environment and spillovers related to the war in Ukraine are posing important challenges for countries around the world, including Egypt,” the IMF said in a statement.

“Continued exchange rate flexibility will be essential to absorb external shocks and safeguard financial buffers during this uncertain time. Prudent fiscal and monetary policies will also be needed to preserve macroeconomic stability.”

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