This paper assesses the performance of the monetary policy in Egypt during the periods following the introduction of the economic reform and structural adjustment program (ERSAP). It sets out to answer the question why the Central Bank of Egypt (CBE) has not been able to achieve the goal of price stability under the ERSAP? The study compares the economic performance from the 1990s with both its counterpart in Germany, during the same periods, and with the economic performance of the Egyptian economy during the periods before the 1990s, i.e., 1975-1990. The study concludes that the CBE could have brought the rate of infl ation down; nevertheless, the unemployment and real GDP growth rates have worsened and a price stability is still far away. The failure to achieve price stability is explained by two reasons, namely, a conflict between monetary policy objectives and a chronic budget deficit financed by issuing new money.