Egypt is targeting an annual inflation of 13 percent in the second half of 2018, the governor of the country s central bank told Bloomberg television on Monday.
“We ve been aggressive in our monetary policy, and this has been resisted a bit. But we thought that it s important so we can get our shop fixed very quickly," Tarek Amer said from Dubai, stressing that the country was moving in "the right direction."
The country is aiming for inflation rates of 13 percent next year, with the medium-term aim of 7 percent, which he said was “important for our financial stability and for our debt capital markets to emerge.”
Egypt floated its currency in November 2016, which led to the value of the Egyptian pound by around half, as part of a series of economic reforms aimed at improving the country s finances.
The move was followed this summer by fuel subsidy cuts.
The country s annual urban inflation climbed in to its highest level in decades in July to 33 percent.
It dipped slightly in August, dropping to 31.9 percent.
The reforms have helped the government secure a $12 billion International Monetary Fund loan and allowed the central bank to revive its foreign currency reserves, which registered at $36.143 billion at the end of August.
The tough decisions are done
Amer said that the country s GDP has grown to become "export-driven."
In the fourth quarter of the 2016/17 fiscal year, which ended in June, GDP surged to reach 4.9 percent, up from 2.3 percent in the same period of the previous year.
“We re done in terms of the reforms and the tough decisions, they re done," Amer said, hinting at the International Monetary Fund s second review of the reform programme, scheduled for the end of October.
He said the upcoming review by the IMF was just a "regular one."
“It s a very large programme for the IMF, it s a home-grown programme; it s our programme. We brought in the IMF to bring in discipline,” he said.
The governor forecast no "major shocks to the economy, or to prices, over the next year.”
