Northwest of Suez: The 1956 Crisis and the IMF


James M. Boughton

Publication Date:

December 1, 2000

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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


Egypt’s nationalization of the Suez Canal in 1956 and the failed attempt by France, Israel, and Britain to retake it by force constituted a serious political crisis with significant economic consequences. For the United Kingdom, it engendered a financial crisis as well. That all four of the combatants sought and obtained financial assistance from the IMF was highly unusual for the time and had a profound effect on the development of the Fund. This case study illustrates the complexities in isolating the current account as the basis for determining a balance of payments “need” and shows that the speculative attack on sterling—and the Fund’s response to it—were remarkably similar to financial crises in the 1990s.


Working Paper No. 2000/192



Publication Date:

December 1, 2000



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