IMF deputy MD arrives in Cairo to discuss economic situation, reform efforts

Doaa A.Moneim , Wednesday 7 Jun 2023

Antoinette M. Sayeh, deputy managing director of the International Monetary Fund (IMF), is visiting Cairo, IMF senior resident representative in Egypt Said Bakhache, told Ahram Online on Wednesday.

The International Monetary Fund logo is seen inside its headquarters at the end of the IMF/World Ban


Sayeh will meet with Egyptian officials and stakeholders to exchange views on the economy and the reform efforts needed to ensure the stability of the Egyptian economy and to boost inclusive growth, Bakhachen said.

During the visit Sayeh will participate in a high-level panel for the launch of the IMF paper on “Managing Fiscal Risks in the Middle East and North Africa” that is organized by the Egyptian Ministry of Finance, the Economic Research Forum, and the IMF on 11 June, according to Bakhache.

The visit takes place against the backdrop of Egypt's ongoing economic challenges, with the first review of Egypt's IMF-backed $3 billion loan deal still up in the air.

The meeting is crucial as it paves the way for the country to receive the second tranche of the loan, amounting to $347 million.

The loan programme’s first review was scheduled on 15 March. However, as Egypt has yet to fulfil its commitments under the deal, the review was bushed to be conducted by end of June with indications that it will face significant challenges in meeting the review's requirements.

The requirements include the implementation of the IPO and privitisation programmes as scheduled as well as adopting a fully free exchange rate and interest rate regimes.

To finalise the loan deal, Egypt committed to a number of reforms, including widening the private-sector role in the economy, reviving the privatisation programme of state-owned entities, limiting the role the government and military play in the economy, tightening the budget deficit, expanding the social safety net, and shifting to a flexible exchange-rate regime.

Kristalina Georgieva, managing director of the IMF, said in April that the IMF is preparing to carry out the loan deal’s first review without giving more details back then.

She added that the government needs to slow the pace of the implementation of large infrastructure projects which “could undermine macroeconomic stability, especially if we take into consideration the speed at which these projects, which were originally conceived under different circumstances, were carried out.”

In April, sources familiar with the loan discussions told Al-Ahram Weekly that the IMF has a number of reservations, mainly regarding the slow pace of the privatisation programme and demands related to tax policy, as well as applying a more flexible exchange rate and using monetary policy tools, namely interest rates, to contain inflation.

Since the start of the loan discussions in March 2022, Egypt has devalued the local currency three times, with the Egyptian pound currently trading at almost LE31 compared to LE15 in February 2022 against the dollar. It increased interest rates by a total of 10 percent during the same period.



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