IMF Working Papers

The Egyptian Stabilization Experience: An Analytical Retrospective

By Arvind Subramanian

September 1, 1997

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Arvind Subramanian. The Egyptian Stabilization Experience: An Analytical Retrospective, (USA: International Monetary Fund, 1997) accessed November 21, 2024
Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper analyzes the successful Egyptian stabilization experience during the 1990s, focusing on its distinctive features and contrasting them with the recent experiences of other developing countries. The key policy elements were a large fiscal adjustment, use of an exchange rate anchor that has endured for over six years, supported by prudent monetary policies, and early moves to liberalize interest and exchange markets. The outcomes included the avoidance of an output collapse despite the magnitude of fiscal adjustment; avoidance of stresses on the financial system; reversal of endemic dollarization; financial deepening at the expense of the banking system; and maintenance of external viability despite a lackluster export performance.

Subject: Balance of payments, Capital inflows, Commercial banks, Financial institutions, Fiscal consolidation, Fiscal policy, Fiscal stance, Inflation, Prices

Keywords: Balance of payments, Banking system viability, Broad money, Capital inflows, Commercial banks, Current account, Debt forgiveness, Eastern Europe, Excess reserves, Fiscal consolidation, Fiscal stance, Inflation, Monetary policy, Output performance, Partnership agreement, Real interest rate, Short-term debt, Treasury bill, WP

Publication Details

  • Pages:

    61

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 1997/105

  • Stock No:

    WPIEA1051997

  • ISBN:

    9781451947595

  • ISSN:

    1018-5941

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