The article estimates a model for Egypt's economy from 2005-2010 to study inflation, output, and monetary policy. It shows that interest rates are not very effective in Egypt, making it hard to use them for monetary policy. The study also finds that the policy rate in Egypt tends to stay the same for a long time, which can make monetary policy follow the economic cycle. To control inflation better, Egypt could use interest rates more actively, improve its debt markets, and gradually switch to targeting inflation.