Boost for Egypt: IMF greenlights loan, urges deeper reforms

The International Monetary Fund (IMF) reached an agreement with Egypt to unlock $820 million in loans, contingent on approval by the IMF’s executive board. 

This financial aid aims to support Egypt’s economic reforms as the country grapples with high inflation and government debt.

The agreement follows a two-week visit by IMF staff to Egypt and marks the third review of an existing loan program.

The funds will be released if Egypt continues its economic restructuring efforts, which include increasing private sector involvement, controlling inflation, and adopting a more flexible exchange rate system.

“Despite ongoing challenges due to geopolitical tensions,” acknowledged IMF Egypt Mission Chief Ivanna Vladkova Hollar, “Egyptian authorities have persevered with reforms.”

She pointed to positive signs, including improved economic outlook, increased foreign exchange reserves, and a slowdown in inflation. 

However, Hollar cautioned about “downside risks” stemming from the Israel-Hamas conflict and attacks on Red Sea shipping, which have negatively impacted Suez Canal revenues.

The IMF emphasized the need for “an acceleration of structural reforms” as crucial to achieving sustainable economic growth driven by the private sector. 

This agreement signals the IMF’s conditional support for Egypt’s economic recovery but underscores the importance of continued reform efforts.

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