The objective of this study was to analyze the effectiveness of monetary policy in controlling the variables in Kaldor magic square (economic growth, unemployment, inflation, and balance of payments) and their impact on Egypt's macroeconomic variables during the study period by addressing the effectiveness of monetary policy in reducing unemployment rates, achieving high economic growth, adjusting inflation to the target rate established by the competent monetary authorities, as well as its effectiveness in achieving a surplus balance of payments, to establish an appropriate monetary policy that would contribute to correcting imbalances in the structure of the Egyptian economy. The VAR methodology was used to study the causal relationship between monetary policy and Kaldor magic square variables over the Egyptian economy during the study period. The study concluded that Egypt's monetary policy during the study period had had an impact on Kaldor variables but to an insufficient extent. The results indicated that monetary policy had not sustained positive effects in the short and long term and thus had not had a significant impact on achieving optimal rates of macroeconomic variables in Egypt.