Egypt needs to strengthen foreign reserves: IMF’s Georgieva

PHOTO

Egypt needs to take action to boost its foreign exchange reserves, Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva told Asharq Business in an interview on June 20th.

Georgieva urged the North African country to prevent the “leakage” of foreign reserves, describing Egypt’s reserve position as “putting water in a bucket that has holes”.

She added that the matter is not only including an economic dimension, but is also a matter of political economy.

“When you have multiple exchange rates, you actually create privileged positions for some and not for others. We also know that when there is support for the currency but not enough foreign exchange that drains reserves and makes the situation of the country more difficult,” she noted.

Moreover, she said that Egypt should boost the competitiveness of its economy via three steps: 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.