Egypt must take action to save its economy or risk ‘putting water in a bucket that has holes’, the head of the International Monetary Fund (IMF), Kristalina Georgieva, has warned.
In an interview with Asharq Business, Georgieva identified three steps for Egypt to boost the competitiveness of its economy, “withdrawal from the activities that better suit the private sector, supporting the most vulnerable groups while providing less support to the rich, and bolstering the country’s foreign exchange reserve.”
She called for taking the necessary measures to prevent the depletion of foreign currency reserves, announcing a review of the economic measures in Egypt by the IMF in September. Egypt is the second largest borrower from the fund after Argentina.
“It is important that Egypt take actions to protect against leakage of foreign reserves, because otherwise it’s like putting water in a bucket that has holes,” she explained, adding that the matter is “not only an economic question, it’s also a question of political economy.”
Egypt floated its currency in 2016, it has devalued the Egyptian pound by about 50 per cent against the dollar since February 2022, when Russia’s invasion of Ukraine triggered an exodus of foreign investors from its treasury markets and a severe shortage of foreign currency.