According to a senior IMF official, the International Monetary Fund will be watching for a shift by Egypt to a flexible exchange rate after a requirement to finance imports through letters of credit is phased out at the end of this month. Last week, the IMF's executive board approved a 46-month, $3 billion financial support package for Egypt, saying it included a "permanent shift to a flexible exchange rate regime".
Egypt negotiated the loan over seven months as the economic fallout from the war in Ukraine brought a foreign currency shortage to the fore. Shortly before the war, Egypt's central bank imposed the requirement for mandatory letters of credit, causing a sharp slowdown in imports and a backlog of goods in ports.
Source: reuters.com