In a move to bolster its economy, Egypt signed a significantly increased loan agreement with the International Monetary Fund (IMF) on Wednesday.
The deal, which expands upon a previous $3 billion loan secured in December 2022, now totals $8 billion.
Egyptian Prime Minister Mostafa Madbouly emphasized that the agreement aligns with the country’s ongoing economic reform plans.
“This program is Egyptian and was prepared by the government and the Central Bank of Egypt,” he declared during a press conference alongside IMF mission chief Ivanna Vladkova Hollar.
The announcement of the expanded loan package comes on the heels of significant steps taken by the Egyptian Central Bank.
Just hours before the IMF deal was finalized, the bank devalued the Egyptian pound and raised interest rates by six percentage points. Ms. Hollar applauded these measures, describing them as “decisive steps to move to a flexible exchange rate system.”
She elaborated that this would involve unifying the official and black-market exchange rates, ultimately aiming to “help increase the supply of foreign currency.”
Egypt’s pursuit of additional financial support is likely linked to recent challenges faced by its foreign currency reserves.
The nation’s tourism industry, a key source of income, has been negatively impacted by a deadly conflict between Israel and Gaza.
Additionally, tensions in the Red Sea have disrupted navigation through the Suez Canal, another significant source of foreign currency for Egypt.
