Arab Finance: The International Monetary Fund (IMF) is considering scenarios for countries to gauge which economies could need fresh financing if the US-Iran war escalates, Bloomberg reported, citing people familiar with the matter.
The fund’s Strategy, Policy, and Review department has asked so-called country desks at the IMF to share their analysis on areas from current account status to potential funding needs.
Speaking at a press briefing on March 19th, IMF Spokesperson Julie Kozack highlighted that the impact of the regional conflict on Egypt has “remained relatively contained."
“We have seen that the authorities have taken a proactive, timely, and well-coordinated response to the conflict. And to the economic impact, they activated a high-level crisis management committee, and that has helped ensure a swift and coherent economic response,” she added.
Kozack elaborated that a flexible exchange rate played a vital role as a “shock absorber,” helping mitigate the impact of global volatility while preserving international reserves.
The official explained: “Egypt is also carefully balancing the need to maintain fiscal discipline, given fiscal pressures, but also to support vulnerable households.”
Egypt’s Prime Minister Mostafa Madbouly recently reviewed the government’s economic reform program and measures to alleviate the impact of regional conflict on supply chains and global trade.
On February 25th, the IMF approved the combined fifth and sixth reviews of Egypt’s economic reform program under the Extended Fund Facility (EFF), allowing the disbursements of about $2.3 billion.
