The Egyptian Ministry of Finance’s decision to adjust the customs dollar exchange rate for non-essential goods, tying it to the Central Bank of Egypt (CBE)’s dollar exchange rate will benefit the Egyptian economy as a whole, said the head of the International Monetary Fund (IMF)’s mission to Egypt Subir Lall.

Lall told MENA on Friday that the decision will help improve the efficiency of resource allocation, including the foreign direct investment.

The decision’s impact on inflation rates will be once and will be limited, he said, noting that the decision marks an important progress.

The previous customs practices, such as conducting transactions at fewer exchange rates included an unnecessary implicit subsidy, he clarified.

Minister of Finance Mohamed Maait decided last week to keep the customs dollar exchange rate for essential commodities unchanged at EGP 16 until the end of December.

The decision also adjusted the customs dollar exchange rate for non-essential and luxury goods to be determined as per the dollar exchange rate set by the CBE.