Rania Al-Mashat, sub governor and chief of monetary policy division at Central Bank of Egypt, said economic growth and stability require clear and transparent monetary and financial policies with precise goals to achieve non-inflationary growth eligible to attract productive investments both in private and foreign sectors.
On the sidelines of the seminar organized by Egyptian Center for Economic Studies under the slogan of “Priorities of Monetary Policy in Egypt”, Al-Mashat added that central bank of Egypt is not the sole responsible for inflation but the whole economic system.
Inflation represents a major chapter in the monetary policy’s book, not a selective policy, adding that the Central bank of England targets an inflation rate of 3%.
There are 27 countries that target certain inflation rates; 9 of which are industrial countries and 18 are emerging. Al-Mashat assured the countries’ ability to overcome crises and implement fast recovery. There are 15 governments in the world are targeting a specific inflation rate with coordination with central banks, 9 countries are relying on central banks to set inflation rates and 3 countries are depending on their governments in setting inflation rates.
Al-Mashat referred said that there are a number of requirements to maintain inflation rate, the most important is reducing the budget deficit, adding that Brazil and Turkey are good example. Also building a effective banking sector with a storng solvency and liquidity is a must.
Central Bank should be independent; to assure transparency and to effectively communicate with banks, investors, audience, academics, journalism, the local and international research centers, and the global institutions.
“It is necessary to build a strong technical infrastructure able to analyze economy and form developed examples for prediction in order to implement the proactive monetary politics and to promote the quality of the economic data” she added.
