International Monetary Fund Senior Resident Representative to Egypt Said Bakhache
The International Monetary Fund (IMF) has reached a staff-level agreement regarding Egypt’s request to acquire a loan under the standby agreement (SBA), after the fund gave Egypt a $2.77 billion loan under the rapid finance instrument (RFI) to address the COVID-19 implications.
In an exclusive interview with Ahram Online, IMF Senior Resident Representative to Egypt Said Bakhache unveiled the measures of disbursing the two loans, saying the fate of the SBA loan will be decided in the coming weeks.
Bakhache noted that Egypt has made significant progress in the first wave of reforms needed to achieve macroeconomic stability, which helped put the country on solid ground to face the ongoing crisis, stressing that a second wave of reforms is needed to sustain strong and inclusive private sector-led growth to further reduce poverty and absorb the large number of new entrants to the labour force expected over the next decade.
What are the repaying conditions of the RFI loan?
The Rapid Financing Facility is part of the IMF’s emergency financing to support its 189 member countries to address the effects of COVID-19. As you know, this emergency financing helps countries meet immediate balance of payments needs which arise from the health and economic crises without the need to have a full-fledged programme in place. In response to members’ large and urgent COVID-19-related financing needs, access limits have been increased from 50 to 100 percent of quota per year, and from 100 to 150 percent of quota on a cumulative basis.
Repayment terms for the emergency financing are quite flexible. For the RFI payment is due within 3¼-5 years of disbursement. https://www.imf.org/en/About/Factsheets/Sheets/2016/08/02/19/55/Rapid-Financing-Instrument#:~:text=The%20Rapid%20Financing%20Instrument%20(RFI,diverse%20needs%20of%20member%20countries.