Publication detail

DID EGYPT SATISFY PREREQUISITES FOR AN IT REGIME?

Author(s): Ibrahim Awad ,
Type: Articles in refereed journals
Year: 2009
Number: 6
ISSN / ISBN:
Published in: ACTA OECONOMICA PRAGENSIA
Publishing place:
Keywords: Infl ation targeting regime; Prerequisites for an infl ation targeting regime; Infl ation targeting in Egypt
JEL codes:
Suggested Citation:
Abstract: The purpose of this study is to answer the question ‘Is Egypt ready to apply an
IT regime?’ The study presumed that a country is ready to apply an IT regime once the
prerequisites for an IT regime are met. Comparing the current position of Egypt with some
emerging market economies, the conclusions of the study are as follows: (i) the CBE is
not factually independent. Although the CBE has been granted legal instrument independence,
the existence of government representatives as voting members on the MPC and
the coercion of the CBE to extend fi nance to the government are two elements suffi cient
to underpin the de facto independence of the CBE; (ii) infl ation targets are expected to be
missed under the possibility that the behavior of the CBE will be similar to the behavior of
the majority of emerging market economies, i.e., adopting an IT regime whereas implicitly
targeting FX rates; and (iii) the current level of knowledge about some central issues of
designing an IT regime and the quality of the available data are not satisfactory to support
the adoption of an IT regime. The study concludes that Egypt is still not ready to apply an
IT regime.

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