Over the past 25 years, Egypt has undergone a variety of exchange rate regimes where it applied the flexible exchange rate regime since 2003. The shift to the flexible exchange rate regime in Egypt aims to attract capital inflows and enable the economy to absorb real external shocks and to simulate exports. However, on the other side Egypt has witnessed high inflation rates since the liberalization of the Egyptian pound, an increase in the value of the debt, and non-increase in the exports.