File photo: International Monetary Fund (IMF) Managing Director Kristalina Georgieva. Photo courtesy of Xinhua News Agency
In early March, the IMF expanded the EFF loan Programme for Egypt to $8 billion, up from $3 billion, in response to the repercussions of the tensions in the Middle East on the country’s economy.
Sources close to the discussions between the two sides told Ahram Online that Egypt would receive $1.5 billion after the IMF completes the two reviews.
The IMF approved the $3 billion EFF loan deal for Egypt in December 2022 after the Russia-Ukraine affected the Egyptian economy adversely.
The EFF loan deal stipulates that Egypt receives a new tranche of the loan with the completion of every review.
Due to unprecedented economic pressures and the impact of global tensions on its economy, Egypt had to postpone the IMF's first and second reviews -- initially scheduled in March and September 2023.
Egypt received only the first tranche of the EFF loan deal ($347 million).
The loan programme would ensure Egypt’s macroeconomic stability and secure private-sector-led growth through:
* Shifting to a flexible exchange rate system that will help Egypt’s domestic economy adjust more smoothly to external shocks, support the ability of Egyptian businesses to sell goods and services abroad and encourage greater investment.
* Tightening monetary and fiscal policy by containing off-budget capital expenditure to reduce inflation and maintain debt sustainability.
* Providing and protecting targeted budget support to vulnerable households in recognition of the adverse impact of high inflation on purchasing power.
* Creating a more equitable balance between the roles of the public and private sectors, enhancing competition, and allowing a greater role for the private sector in driving growth.
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