The International Monetary Fund (IMF) announced that its executive board had approved a loan to Egypt of about USD3 billion over 46 months.
The decision enables an immediate disbursement of about 347 million dollars to Egypt, “which will help meet the balance of payments need and provide support to the budget”, the IMF said in a statement, adding the loan package is expected to encourage Egypt’s international and regional partners to provide an extra USD14 billion to finance the most populous Arab country.
According to the IMF, the financial support was granted in exchange for an economic reform programme from the Egyptian government, which it hopes can pave the way for “sustainable, inclusive and private-sector-led growth”.
The United States (US)-based finance institution also asked Egypt to make “a permanent shift to a flexible exchange rate regime”, ensure the “downward trajectory in public-debt-to-GDP”, reduce “the state footprint”, “facilitate private-sector-led growth” and more.
The IMF’s loan comes at a time when Egypt is suffering high inflation and foreign currency shortage after the Russia-Ukraine situation prompted capital flight from emerging markets.