Prime Minister Mostafa Madbouly (photo courtesy of the Egyptian Cabinet)
A one-year bailout loan Egypt may receive from the International Monetary Fund (IMF) will not lead to a rise in the prices of commodities and services, Prime Minister Mostafa Madbouly said on Wednesday.
Earlier this week, Egypt said it had asked the IMF for financial assistance to deal with the economic fallout of the coronavirus.
Madbouly said the IMF loan would be a “proactive step” against potential repercussions on Egypt’s economy and to protect foreign currency reserves and preserve the gains achieved by economic reforms in recent years.
The new loan programme “will not have any negative effects on the lives of citizens, whether in terms of raising prices of commodities, services or otherwise,” Madbouly told a cabinet meeting via video conference on Wednesday.
The potential loan is linked to structural reforms only, he stressed.
Many Egyptians are still struggling due to the austerity measures adopted under the economic reform programme tied to a three-year $12 billion loan deal signed with the IMF in November 2016. As part of the reform programme, the government floated the currency, slashed energy subsidies, and introduced a value-added tax.
Egypt is requesting the new loan under the IMF's Rapid Financing Instrument (RFI) and a Stand-By Arrangement (SBA), a statement by IMF Managing Director Kristalina Georgieva said.
During Wednesday's meeting, Madbouly said a coronavirus crisis management committee has prepared a set of precautionary measures against the virus as government bodies begin to gradually resume their services which were previously suspended to curb the spread of the virus.
He said a number of services which were launched online as part of the measures to control infections will continue to be provided online only even after the crisis subsides to reduce crowding at government offices.