Egypt needs more flexible exchange rate, IMF says

Egypt would benefit from a more flexible currency regime that would help the country attract investment and tourists and create jobs, the International Monetary Fund said.

“A more flexible exchange rate policy focused on achieving a market-clearing rate and avoiding real appreciation would improve the availability of foreign exchange, strengthen competitiveness, support exports and tourism, and attract foreign direct investment,” IMF mission chief Paul Jarvis said in an e-mailed statement late yesterday. It followed two weeks of talks between the mission and Egyptian authorities in Cairo.

Egypt’s pound has slid against the dollar on the black market even as the official exchange rate hasn’t changed in about five months. The gap between the two rates was almost 8 percent last week, according to a Bloomberg survey of unofficial traders. Central bank Governor Hisham Ramez vowed this month to eliminate the black market, and described the bank’s policy as a “managed float” of the currency.