IMF to provide Egypt with part of $3bln loan this FY

Staff Writer, Mubasher

January 11, 2023

An employee counts Egyptian pounds in a foreign exchange office in central Cairo, Egypt, November 3, 2016. Image used for illustrative purpose.
Reuters Images/Mohamed Abd El Ghany

The International Monetary Fund (IMF) will provide Egypt with $700 million of the $3 billion loan in the fiscal year (FY) that ends in June 2023.

The remaining value of the loan, equivalent to $2 billion, will be granted to Egypt through six tranches, each totalling $347 million, in March and September of every year until September 2026.

In December 2022, the IMF’s Executive Board approved a 46-month arrangement under the Extended Fund Facility (EFF) for Egypt in an amount of SDR 25 million (equivalent to 115.40% of quota or about $3 billion).

The board’s decision enables an immediate disbursement of SDR 261.13 million (equivalent to about $347 million), which will help meet the balance of payments need and provide support to the budget.

The IMF estimates the financing gap over four years, the duration of the programme, at $16 billion, equivalent to $4 billion per year.

Egypt’s IMF-supported programme presents a comprehensive policy package to preserve macroeconomic stability, restore buffers, and pave the way for inclusive and private-sector-led growth.

The package includes a durable shift to a flexible exchange rate regime, a monetary policy aimed at gradually reducing inflation, fiscal consolidation to ensure a downward public debt trajectory while enhancing social safety nets to protect the vulnerable, and wide-ranging structural reforms to reduce the state footprint and strengthen governance and transparency.

In FY21/22, the Egyptian economy grew faster than expected by 6.60%, compared to 3.30% in the previous year. The country’s gross domestic product (GDP) exceeded the IMF’s expectations and grew by 5.90%, the highest rate since 2008.

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