| المستخلص: |
The purpose of this paper is to review the performance of the monetary policy in Egypt during (1997-2004).Many salient economic lows and decrees were promulgated, such as the law NO 88/2003 on the central bank of Egypt(CBE),the banking system and currency. Also the decree on liberalizing the L.E. exchange rate. In addition to reduce the discount rate and reserves ratio. The main finding after reviewing the monetary and banking policy and developments in monetary aggregate, the monetary authorities couldn't achieve all the objectives of the monetary policy. The Egyptian pound lost 86% of its value in 2004 compared with 97.As a reflection, the inflation rate become double although the decreasing in the monetary expansion. Moreover ,the net international reserves declined by 26.7% in the same period as a result of CBE interference in the foreign exchange market as a seller of the foreign exchange. Finally, the paper make a number of recommendations to activate the monetary policy such as, pegging the Egyptian pound to a basket of currencies, restructuring the interest rates, necessity of reducing the percent of credit provided by banks, move forward to incorporate a central authority(financial control committee) to supervise and control the financial sector, preparing and publicizing a monetary policy framework based on the principle of targeting inflation, offer more support to CBE and the Egyptian banking system, Moreover the CBE should enjoy real independence in defining monetary policy implementation tools.
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