The Egyptian Stabilization Experience: An Analytical Retrospective
September 1, 1997
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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
Pages:
61
Volume:
1997
DOI:
Issue:
105
Series:
Working Paper No. 1997/105
Stock No:
WPIEA1051997
ISBN:
9781451947595
ISSN:
1018-5941
