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Egypt will receive the first instalment of an extended loan agreement with the International Monetary Fund (IMF) next week. The International Monetary Fund (IMF) has approved a USD 5 billion augmentation to its loan program for Egypt. This decision will facilitate an immediate disbursement of USD 820 million.
The IMF stated on Friday that the approval from the executive board increases the Extended Fund Facility arrangement from the initially approved USD 3 billion in December 2022 to USD 8 billion. The decision is expected to facilitate an immediate disbursement of USD 820 million. According to the IMF Managing Director Kristalina Georgieva, Egypt is facing huge macroeconomic challenges that have become more complex to manage given the spillovers from the recent conflict in Gaza and Israel.
The new funding move comes as part of efforts to boost the country’s economy. Egypt’s recent IMF agreement, unveiled on March 6, came after the long-anticipated currency flotation, causing the pound to drop 40% against the dollar. The adjustment was facilitated by funding from a USD 35 billion deal with the United Arab Emirates, the largest inward investment in Egypt’s history. However, the country of over 105 million people has also faced additional economic challenges due to conflicts abroad. Russia’s incursion into Ukraine raised wheat and oil import costs, depleting dollar reserves.
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https://trendsnafrica.com/egypt-may-devalue-currency-to-avail-imf-loan-sources/
Egypt, already the IMF’s second-biggest borrower after Argentina, anticipates receiving USD 1.2 billion in extra financing from the lender. With the devaluation and commitments in place, investors attracted by high yields and a more affordable currency have surged into Egypt’s local bonds at an unprecedented rate.
