Egypt Case Study

Main highlights for the period: 2000 – 2010 Domestic currency interbank introduction (2001) A new Law in (2003) provided independence to the central bank through its own instruments. Exchange rate Regime: Crawling peg in 2001 followed by a managed floating regime in 2003.

Foreign exchange currency interbank activation (December 2004) New monetary policy framework launch of corridor system (June 2005) Introducing new Open Market Operation instruments: CDs and CB notes, in addition to the reactivation of the deposits auctions Exchange rate Regime: Floated active foreign exchange, relative stabilization, parallel market elimination

ADF the level

ADF after first difference

Lag Lenth

Stability Test

Impulse Response If we remove op

Impulse Response If we add op

Variance Decomposition

Granger causality test