Abstract:
This paper reviews historical developments of monetary policy in Egypt over the last two decades and offers a new vision for the future. The analysis covers the monetary regime prior to the reforms of the early 1990s, as well as the post-reform era until now. The main features of the new monetary policy involve a major shift from using the exchange rate as a nominal anchor to inflation-targeting and increasing reliance on indirect instruments. The study stresses that the success of the new policy hinges on a number of factors, including central bank operational independence, policy transparency, and accuracy and timeliness of information.
