Egypt is facing a difficult dilemma to determine its local currency policy, which puts pressure on the country's economy and push inflation to record highs, Asharq Business reported, citing a research note by Goldman Sachs.
The dilemma is for the Egyptian authorities to weigh the costs of devaluing the currency and moving to a flexible exchange rate regime against potential economic risks from the continuation of the parallel market, according to Goldman Sachs.
Goldman Sachs also indicated that Egypt’s governmental initial public offering (IPO) program would reduce the risks of a significant decline in the exchange rate and the negative economic consequences associated with it.
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