Currency Devaluation and Export Promotion: Does the IMF Prescription work for Egypt?

Refaat, Rawheia; Abou-Zaid, Ahmed

doi:10.21608/jocu.2025.418098.1477

Currency Devaluation and Export Promotion: Does the IMF Prescription work for Egypt?

نوع المستند : مقالات سیاسیة واقتصادیة

المؤلفون

Rawheia Refaat ¹
Ahmed Abou-Zaid ²

¹ كلية السياسة والاقتصاد جامعة السويس

² Eastern Illinois University-U.S.A & American University in Cairo-Egypt

10.21608/jocu.2025.418098.1477

المستخلص

This paper investigates the impact of currency devaluation on export promotion in Egypt using the Autoregressive Distributed Lag (ARDL) model with annual data from 1990 to 2022. The results reveal that exports are strongly influenced by imports, while GDP and the exchange rate do not exert a statistically significant effect in either the short or long run. Error-correction estimates confirm the absence of a stable cointegrating relationship between exports and the exchange rate. Complementary elasticity analysis of Egypt’s leading export and import products shows that exports often respond to global price changes, while essential imports such as energy remain inelastic and crucial for production. These findings point to a structural dependence of exports on imported inputs, which offsets the potential competitiveness gains of currency depreciation. The study concludes that effective export promotion in Egypt may require reducing import dependence, strengthening domestic supply chains, and enhancing productivity, with exchange rate policy playing only a supporting role.

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