IMF mission in Cairo to discuss reviews of Egypt’s reform programme

Doaa A.Moneim , Saturday 20 Jan 2024

The International Monetary Fund (IMF) team, led by Mission Chief for Egypt Ivanna Vladkova Hollar, is currently in Cairo for ongoing discussions on the first and second reviews of Egypt’s reform programme supported by the IMF’s Extended Fund Facility (EFF), the IMF’s spokesperson told Ahram Online (AO).

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


The IMF has not clarified whether the visit includes discussions on additional financing for Egypt.

The spokesperson mentioned that the outcomes of the visit will be disclosed after its conclusion.

Meanwhile, IMF’s Director of the Middle East and Central Asia Department Jihad Azour visited Egypt last week, where the IMF held its annual retreat with local offices in the Middle East, North Africa, Caucasus, and Central Asia regions, according to the spokesperson.

During his visit, Azour met with the Egyptian authorities as well as regional stakeholders, the spokesperson told AO.

The IMF is discussing with the Egyptian authorities a set of policies that would support the completion of the first and second reviews of the EFF which Egypt has with the Fund, the head of the Communications Department (COM) at the IMF and the Fund’s spokesperson Julie Kozack told AO on January.

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

According to very close sources to the ongoing discussions, new IMF financing for Egypt is on the table, which could bring the total financing for Egypt to $6 billion.

“Egypt’s new IMF programme could reach USD8.0 bn due to preferential treatment. This is a result of the more difficult external environment, Egypt's geopolitical importance, and about USD5.4 bn in principal due to the IMF in 2024,” Ramona Moubarak, the head of MENA Country Risk at Fitch Solutions, expected in a webinar held by Fitch’s BMI company last week.

Moubarak also expected the IMF to waive the requirement of a flexible exchange rate and allow a currency adjustment instead, and a significant share of the funds would be disbursed immediately.

“We continue to expect the Egyptian pound adjustment will start in late March 2024 or early in Q2 2024 as by then inflation will be slower, around the mid-20% range. Our forecast remains that the pound will weaken to between EGP40 and EGP45 against the USD with risks skewed towards a weaker rate of EGP50/1USD”, she added.

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