1. Over the last decade, the Egyptian economy suffer from sever collapse due to several reasons such as; January revaluation, Covid-19 pandemic. As a result, the Egyptian BOP is negatively affected and the Egyptian Economy suffer from sever financial disaster. To solve and mitigate the impact of this financial collapse and reform the Egyptian economy, the Egyptian Government decide to borrow fund from the IMF. To provide this borrowed fund to the Egyptian Government, the IMF imposed some conditions on the Egyptian Government such as reducing the provided subsidies and increase the level of the national reserve. Therefore, the Egyptian Government decides to switch the Foreign Exchange regime from the managed floating regime to free floating regime.

a. Analyze the extent to which you agree with the decision of the Egyptian decision to switch from the switch from a managed float exchange rate regime to a floating exchange rate regime. And analyze the potential economic implications and impact of this decision on the short, medium, and long term. (5 marks)

b. As a financial expert, provide the Egyptian Government with your recommendations that may help in recovering the Egyptian Economy and correct the deficit of BOP. Provide your recommendations with analyzing the obstacles of the international trade and the economic reforming in Egypt