Egypt's $3 billion loan programme to advance soon: IMF managing director

Ahram Online , Sunday 3 Dec 2023

The International Monetary Fund (IMF) is on the verge of advancing with the next steps in Egypt's $3 billion loan programme shortly, Kristalina Georgieva, the managing director of the fund, said on Saturday.

File Photo: Kristalina Georgieva. AFP
File Photo: Kristalina Georgieva. AFP


Georgieva confirmed that the IMF would provide support to the Egyptian economy and highlighted the country's commendable efforts in navigating challenging circumstances.

During an interview with Asharq Business at the COP28 climate summit being held in Dubai, Georgieva was asked if the programme would advance during the first quarter of 2024, to which she responded: "Yes, soon."

However, she did not provide specific details on whether the fund would relax requirements or if Egypt would comply with those requirements.

Key commitments for Egypt under this programme include implementing flexible interest and exchange rate regimes, promoting private sector participation, reducing debt and inflation levels to pre-pandemic figures by the programme's end, and offering stakes in 35 state-owned companies to strategic investors by 2024.

Egypt has been actively pursuing the completion of the four-year loan programme, which allows the country to access $3 billion in eight installments, with hopes to increase it to $5 billion.

Following the agreement's conclusion in December 2022, Egypt received the initial installment.

The country was slated to receive two more tranches in March and September of this year, but these were delayed. Egypt has yet to fulfill the two reviews stipulated in the loan agreement.

In November, Georgieva stated that the IMF was contemplating expanding Egypt's loan programme by an undisclosed amount, considering the ongoing economic challenges and the impact of the Israeli war on Gaza.

In October, she emphasized that Egypt would deplete its reserves unless it devalued its currency once again. However, Georgieva acknowledged the positive steps taken by the country to address the severe economic crisis.

Since March 2022, Egypt has devalued its currency three times in response to a foreign-currency crunch. With these three waves of devaluation, the Egyptian pound has lost over 75 percent of its value against the US dollar since March 2022.

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