IMF urges Egypt to address FX reserves leakage and multiple exchange rates

Georgieva added, in an interview with Al Sharq Bloomberg published on Tuesday, that “when there is a support for the currency but not enough foreign exchange then this decreases the reserves and makes the situation of the country more difficult.”

She pointed out that having multiple exchange rates creates a privileged position for those who exchange their dollars on the parallel market, rather than at the official rate.

The Egyptian pound has lost over 100 percent of its trading value against the dollar since March 2022. Before the outbreak of the war in Ukraine, a dollar was trading for around EGP 15, whereas now it trades for EGP 31 at official rates.

However, in the parallel market, the dollar trades for between EGP 35-40.

The managing director’s remarks come after President Abdel-Fattah El-Sisi stated last week that the country has no intention of further devaluating the pound amid an inflationary wave that has depressed Egyptians’ purchasing power.

El-Sisi said last week “we are flexible in the exchange rate, to be clear. But when the matter touches on Egypt’s national security, and the Egyptian people are lost? No. No, no, no.”