Egypt moved gradually from a command economy to a more market economy, in monetary and financial as well as other areas, with exchange rate controls giving way to loose exchange rate targeting followed by a heavily managed float, but the plan to move to inflation targeting remains unrealised.
|Years||Targets and attainment||Classification|
|1974-76||multiple exchange rates; banking system almost entirely nationalised, directed to finance state-determined investments; monetary policy instruments direct||multiple direct controls MDC|
|1977-91||multiple exchange rates frequently changed and adjusted, never quite unified; halting moves from command economy of 1960s and early 1970s towards more market economy, but monetary instruments remain mostly direct, forex markets heavily controlled; major entry of small mainly foreign banks; recurring fiscal dominance; rising dollarisation||unstructured discretion UD|
|1992-2002||exchange rate finally unified and pegged de facto to USD (but depreciations 2000-01); monetary instruments become mainly indirect and policy focused on exchange rate stability||loose exchange rate targeting LERT|
|2003-17||exchange rate formally floated but more or less heavily managed; monetary instruments indirect; central bank has some more autonomy, but recurring monetary financing of high budget deficits; medium-term plan is to move towards inflation targeting, but crucial steps (including genuine exchange rate float) never quite taken until major new reform programme November 2016 supported by IMF, with forex liberalised, exchange rate floated, plans to strengthen central bank independence and move to IT||loosely structured discretion LSD|
Selected IMF references: RED 1975 section IV.1 and pp47-8; RED 1978 section V.1 and pp42-6; SR 1989 2-4, 24-8; RED 1992 pp33-4, 47-52; SR 1992 pp17-18; RED 2000 section IV.B; SR 2005 pp13-15; SR 2006 pp14-16; SR 2015 p10; SI 2018 pp38-44; SR 2018 pp18-20.
Additional sources: Selim (2011); Al-Mashat (2011).
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