IMF in discussion with Egypt to set key policy priorities for the country’s economy

Doaa A.Moneim , Thursday 11 Jan 2024

The International Monetary Fund (IMF) is discussing with the Egyptian authorities a set of policies that would support the completion of the first and second reviews of the Extended Fund Facility (EFF) that Egypt has with the Fund, head of the Communications Department (COM) at the IMF and the spokesperson for the Fund Julie Kozack told Ahram Online.

IMF
File photo: The International Monetary Fund headquarters in Washington D.C. AFP

 

Kozack made her remarks in response to Ahram Online's question on the details of the meeting held during a hybrid conference the IMF's COM held in Washington DC on Thursday between the Managing Director of the IMF, Kristalina Georgieva, and the high-level Egyptian delegation. 

In December 2022, the IMF approved a $3 billion EFF loan program for Egypt. Since then, Egypt has not completed the first and second reviews under the program amid the ongoing challenges facing the country’s economy due to global and regional geopolitical tensions.

“This strong engagement with the authorities has helped achieve important progress in the discussions. We expect those discussions to continue in the coming weeks to operationalize the key policy priorities,” Kozack further noted.

Some of these policies, according to Kozack, include the need to tighten monetary policy and fiscal policy and to move toward a flexible exchange rate system, which would support the authorities' commitment to reduce inflation and gradually move to an inflation-targeting regime.

“And at the same time, additional financing will be critical to ensure successful program implementation,” according to Kozack, adding that details regarding the approval of the additional amount will be announced in due course.

In December, the IMF spokesperson announced that the fund is discussing with Egyptian authorities providing additional financing to ensure the successful implementation of the policy package for Egypt to help it withstand the repercussions of the recent conflict in the Middle East and its potential adverse impact on tourism revenues.

“We are seeing some effect on Egypt particularly, for example, through the disruptions in the Red Sea, and also areas that support the current account such as tourism, and I'll stop there on Egypt,” Kozack highlighted.

A high-level delegation from the Egyptian government began a visit to Washington DC on Tuesday to push forward Egypt's almost standstill loan program with the International Monetary Fund (IMF) and explore a new loan for the country amid its ongoing economic difficulties.  

The visit also included a meeting with Secretary of the US Department of Treasury Janet Yellen.

 

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