While the International Monetary Fund (IMF) attempts to achieve financial stability to promote growth and alleviate poverty, outcomes may backfire causing financial burdens. Egypt launched an economic reform program last November as part of its deal with the IMF; however, financial burdens increased, poverty spread even more and the miscalculation of the fair value of the Egyptian pound has only made the situation worse. In the article ‘Are the reforms paying back?’ Omar El-Shenety questions the implications of the monetary policy and how it puts huge burdens on the budget. “The burden on the budget due to monetary moves since the application of the IMF program and assuming no increase in interest rates or increases in the dollar exchange rate is around EGP 125-135 billion on an annual basis, while the savings in the budget due to the fiscal austerity program are around EGP 115-130 billion, including the upcoming increase in electricity prices and assuming no further increases in international oil prices. As a result, technically we have not really started saving yet, and more aggressive cuts need to be on the way to get the budget under control. With this…
