The International Monetary Fund (IMF) announced on Thursday that it has reached a staff-level agreement with Egypt on the third review of an expanded IMF loan program. This agreement could lead to the disbursement of approximately $820 million to Cairo upon approval by the IMF board.
The agreement comes after an IMF mission to Cairo from May 12-26 to review Egypt’s reform performance under an Extended Fund Facility loan. Initially set at $3 billion in December 2022, the loan was expanded to $8 billion in March.
Despite regional challenges, including the impacts of the war in Gaza and disruptions in Red Sea shipping that have affected Suez Canal receipts, Egypt’s efforts to restore macroeconomic stability are showing progress.
IMF Egypt mission chief Vladkova Hollar, said, “While geopolitical tensions and their impact on Egypt remain challenging, the authorities have stayed the course to preserve macroeconomic stability through fiscal discipline, tight monetary policy, and a shift to a flexible exchange rate regime. These efforts are beginning to deliver an improved outlook, improved FX availability, inflation starting to slow down, and signs of recovery in private sector sentiment.”
Hollar emphasised the need for Egypt to continue prudent fiscal policies, divestment of state enterprises, and tight monetary policy to control inflation.
The IMF’s Executive Board is expected to consider the staff agreement and potential disbursement in the coming weeks.
Melissa Enoch
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