Governor of the Central Bank of Egypt: Inflation is our priority, not the exchange rate
In important statements outlining the features of Egypt’s monetary policy in the coming period, Hassan Abdullah, Governor of the Central Bank of Egypt , emphasized a fundamental economic concept related to the nature of the work of central banks, explaining that the role of the governor is not to maintain the “strength of the currency” or to set a fixed exchange rate for it, but rather to manage monetary policy in a way that ensures price stability and curbs inflation.
The philosophy of the new monetary policy
These remarks were made during Abdullah's participation in the second edition of the Al-Ula Emerging Markets Economies Conference 2026, where he emphasized that the true measure of central banks' success globally is their ability to control inflation rates. He explained that focusing on fixing the exchange rate in the past had economic costs, while shifting towards inflation targeting gives the economy greater flexibility to absorb external and internal shocks, which enhances the effectiveness of economic policies in the medium and long term.
Overcoming the challenges of the past
The Central Bank Governor addressed the historical context of the crises that have faced the Egyptian economy, pointing to a period of instability that saw restrictions imposed on foreign trade in an attempt to preserve foreign reserves. He emphasized that these policies, while necessary at the time, posed exceptional challenges and led to a decline in the country's credit rating before the start of the radical reform process.
He added that the current economic reform program has focused primarily on addressing structural imbalances by adopting a flexible exchange rate that reflects supply and demand forces, which has eliminated the parallel market and restored confidence among investors and international institutions in the Egyptian economy.
Indicators of recovery and developmental role
Speaking about positive indicators, Abdullah pointed out that the recent decline in inflation rates is evidence of the success of the central bank's tightening policies. He also noted a significant improvement in Suez Canal revenues, coinciding with stable macroeconomic indicators, reflecting a gradual recovery in foreign currency reserves.
The governor concluded his remarks by emphasizing the importance of giving the private sector the space to lead the economic growth engine, noting that the Egyptian economy possesses enormous potential that enables it to achieve sustainable growth rates, provided that it continues to adhere to monetary and fiscal discipline to face any potential future challenges.
