The International Monetary Fund’s executive board has approved the first review of a $12 billion loan to Egypt and has disbursed $1.25 billion, the final instalment of the first $4 billion tranche of the loan, according to an IMF statement.
"The approval by the IMF Executive Board of the First Review of the program shows the IMF’s strong support for Egypt in these efforts. We believe that these efforts will yield results," the fund's chief Christine Lagarde was quoted as saying in the statement on Thursday.
The $1.25 billion dispersal was originally expected to arrive toward the end of June, but Finance Minister Amr El-Garhy told Reuters last month that that there were no obstacles to Egypt obtaining the loan, saying that the dispersal was delayed due to bank procedures and the completion of IMF executive board meetings.
In mid-August 2016, Egypt reached a staff-level agreement with the IMF over a three-year $12 billion loan to endorse the country’s fiscal reform programme, which the government embarked on in 2014 in an attempt to curb the growing state budget deficit.
In November, Egypt received the first funding instalment – an initial dispersal of $2.75 billion – of the first tranche following the floating of the Egyptian pound.
The next review will be in either November or December, El-Garhy said in June, adding that Cairo expects to receive the second $4 billion tranche in two instalments during the 2017-18 fiscal year, which begins in July.
“We look forward to continuing our partnership with Egypt to help unleash its economic potential and achieve higher and more inclusive growth that benefits all the Egyptians,” Lagarde said.